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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000351789-01-500009.txt : 20010601
<SEC-HEADER>0000351789-01-500009.hdr.sgml : 20010601
ACCESSION NUMBER:		0000351789-01-500009
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20010331
FILED AS OF DATE:		20010517
DATE AS OF CHANGE:		20010531

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ELECTRO SENSORS INC
		CENTRAL INDEX KEY:			0000351789
		STANDARD INDUSTRIAL CLASSIFICATION:	3823
		IRS NUMBER:				410943459
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		
		SEC FILE NUMBER:	000-09587
		FILM NUMBER:		1642910

	BUSINESS ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343-9108
		BUSINESS PHONE:		9529300100

	MAIL ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>form10qsb.htm
<DESCRIPTION>FORM 10-QSB
<TEXT>

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<head>
	<TITLE>Form 10-QSB</TITLE>
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<body>

<center><font face="'Verdana','Courier'" size="-2">UNITED STATES</font></center>
<center><font face="'Verdana','Courier'" size="-2">SECURITIES AND EXCHANGE COMMISSION</font></center>
<center><font face="'Verdana','Courier'" size="-2">Washington, DC 20549</font></center><br>

<center><font face="'Verdana','Courier'" size="-2"><b>FORM 10-QSB</b></font></center><br><br>

<center><font face="'Verdana','Courier'" size="-2">[X]&nbsp; QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></center><br>
<center><font face="'Verdana','Courier'" size="-2"><b>For the quarterly period ended March 31, 2001</b></font></center><br>

<center><font face="'Verdana','Courier'" size="-2">[&nbsp;&nbsp;]&nbsp; TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></center><br>
<center><font face="'Verdana','Courier'" size="-2">For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>to <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></center><br><br>

<center><font face="'Verdana','Courier'" size="-2"><b>Commission file number 0-9587</b></font></center><br><br>

<center><font face="'Verdana','Courier'" size="-2"><b>ELECTRO-SENSORS, INC.</b></font></center>
<center><font face="'Verdana','Courier'" size="-2">(Exact name of small business issuer as specified in its charter)</font></center><br>

<table width="760" cellpadding="2">
<tr>
    <td align="center" width="428"><font face="'Verdana','Courier'" size="-2"><b>Minnesota</b></font></td>
    <td align="center" width="328"><font face="'Verdana','Courier'" size="-2"><b>41-0943459</b></font></td></tr>
<tr>
    <td align="center" width="428"><font face="'Verdana','Courier'" size="-2">(State or other jurisdiction of incorporation or organization)</font></td>
    <td align="center" width="328"><font face="'Verdana','Courier'" size="-2">(IRS Employer Identification
Number)</font></td></tr></TABLE><br><br>

<center><font face="'Verdana','Courier'" size="-2"><b>6111 Blue Circle Drive<br>Minnetonka, Minnesota 55343-9108</b></font></center>
<center><font face="'Verdana','Courier'" size="-2">(Address of principal executive offices)</font></center><br>

<center><font face="'Verdana','Courier'" size="-2"><b>(952)930-0100</b></font></center>
<center><font face="'Verdana','Courier'" size="-2">(Issuer's telephone number)</font></center><br><br>

<center><font face="'Verdana','Courier'" size="-2">(Former name, former address and former fiscal year, if changed since last report)</font></center><br><br>

<p><font face="'Verdana','Courier'" size="-2">Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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] &nbsp;&nbsp; No [&nbsp;&nbsp;]</font></p>

<p><font face="'Verdana','Courier'" size="-2">Shares of $0.10 par value common stock outstanding at May 11, 2001:  3,118,932</font></p>

<p><font face="'Verdana','Courier'" size="-2">Transitional Small Business Disclosure Format (Check one):  Yes [&nbsp;&nbsp;] No [X]</font>

<br><br><br><br>

<hr size="1">


<br><br>
<div align="center"><font face="'Verdana','Courier'" size="-2"><b>TABLE OF CONTENTS</b></font></div><br><br><br>
<font face="'Verdana','Courier'" size="-2">
<b>PART I - FINANCIAL INFORMATION</b><br><br>
Item 1.&nbsp;&nbsp; Financial Statements<br>
Item 2.&nbsp;&nbsp; Management's Discussion and Analysis or Plan of Operation<br><br>
<b>PART II - OTHER INFORMATION</b><br><br>
Item 1.&nbsp;&nbsp; Legal Proceedings<br>
Item 2.&nbsp;&nbsp; Changes in Securities and Use of Proceeds<br>
Item 3.&nbsp;&nbsp; Defaults Upon Senior Securities<br>
Item 4.&nbsp;&nbsp; Submission of Matters to a Vote of Security Holders<br>
Item 5.&nbsp;&nbsp; Other Information<br>
Item 6.&nbsp;&nbsp; Exhibits and Reports on Form 8-K<br><br>
<b>SIGNATURES</b></font>

<br><br><br><br>

<hr size="1">


<br><br>
<p><font face="'Verdana','Courier'" size="-2"><b>PART I - FINANCIAL INFORMATION</b></font></p>

<p><font face="'Verdana','Courier'" size="-2"><b>Item 1. Financial Statements</b></font></p>

<p><font face="'Verdana','Courier'" size="-2">The interim financial statements included in this Form 10-QSB are unaudited and reflect in the opinion of management all adjustments (which include only normal recurring adjustments) necessary for a fair
presentation of the results of operations for these periods.</font></p>

<br><br><br>

<center><font face="'Verdana','Courier'" size="-2"><b>ELECTRO-SENSORS, INC. AND SUBSIDIARY COMPANIES</b></font></center><br>
<center><font face="'Verdana','Courier'" size="-2"><b>CONSOLIDATED INCOME STATEMENTS</b></font></center>
<center><font face="'Verdana','Courier'" size="-2"><b>(Unaudited)</b></font></center><br><br>

<table width="760" cellpadding="2">
<tr>
    <td width="80"></td>
	<td width="350"></td>
	<td align="center" width="240"><font face="'Verdana','Courier'" size="-2"><b>Three Months Ended<br><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 31,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></b></font></td>
	<td width="80"></td></tr></table>

<table width="760" cellpadding="2">
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></b></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></b></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">SALES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,342,344</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,780,400</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">COST OF SALES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;501,853
</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;672,597</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">GROSS MARGIN</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;840,491</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,107,803</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">OPERATING EXPENSES</font></td></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Selling Expense</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">296,258</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">364,831</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Administrative Expense</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">215,337</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">227,337</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Research and Development</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;188,027</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;222,537</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">TOTAL OPERATING EXPENSES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;699,622</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;814,705</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">INCOME FROM OPERATIONS</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;140,869</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;293,098</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">OTHER INCOME (EXPENSE)</font></td></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Interest Income</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">33,498</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">28,694</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Sale of Investments</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">1,426,567</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">0</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Other</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(60,767</u>)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(65,266</u>)</font></td>
	<td width="93"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">TOTAL OTHER INCOME</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,399,298</u></font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(36,572</u>)</font></td>
	<td width="99"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">INCOME BEFORE INCOME TAXES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">1,540,167</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">256,526</font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">PROVISION FOR INCOME TAXES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;554,472</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;92,550</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">NET INCOME</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;985,695</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;163,976</u></font></td>
	<td width="80"></td></tr></table>

<br><br>

<table width="760" cellpadding="2">
<tr>
    <td width="75"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">WEIGHTED AVERAGE NUMBER OF COMMON</font></td>
	<td align="right" width="120"></td>
	<td align="right" width="120"></td>
	<td width="85"></td></tr>
<tr>
    <td width="75"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">AND COMMON EQUIVALENT SHARES</font></td>
	<td align="right" width="120"></td>
	<td align="right" width="120"></td>
	<td width="85"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="75"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">Basic</font></td>
	<td align="right" width="112"><font face="'Verdana','Courier'" size="-2">3,043,727</font></td>
	<td align="right" width="114"><font face="'Verdana','Courier'" size="-2">1,987,858</font></td>
	<td width="99"></td></tr>
<tr>
    <td width="75"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">Diluted</font></td>
	<td align="right" width="112"><font face="'Verdana','Courier'" size="-2">3,071,533</font></td>
	<td align="right" width="114"><font face="'Verdana','Courier'" size="-2">1,987,858</font></td>
	<td width="99"></td></tr></table>

<br><br>

<table width="760" cellpadding="2">
<tr>
    <td width="75"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">EARNINGS PER COMMON AND</font></td>
	<td align="right" width="120"></td>
	<td align="right" width="120"></td>
	<td width="85"></td></tr>
<tr>
    <td width="75"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">COMMON EQUIVALENT SHARES</font></td>
	<td align="right" width="120"></td>
	<td align="right" width="120"></td>
	<td width="85"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="75"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">Basic</font></td>
	<td align="right" width="112"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.32</font></td>
	<td align="right" width="114"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.08</font></td>
	<td width="99"></td></tr>
<tr>
    <td width="75"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">Diluted</font></td>
	<td align="right" width="112"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.32</font></td>
	<td align="right" width="114"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.08</font></td>
	<td width="99"></td></tr></table>

<br><br><br><br>

<hr size="1">


<br><br><br>
<center><font face="'Verdana','Courier'" size="-2"><b>ELECTRO-SENSORS, INC. AND SUBSIDIARY COMPANIES</b></font></center><br>
<center><font face="'Verdana','Courier'" size="-2"><b>CONSOLIDATED BALANCE SHEETS</b></font></center>
<center><font face="'Verdana','Courier'" size="-2"><b>(Unaudited)</b></font></center><br><br>

<table width="760" cellpadding="2">
<tr>
    <td width="80"></td>
	<td width="350"></td>
	<td width="120" align="center"><font face="'Verdana','Courier'" size="-2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 31,</b></font></td>
	<td width="120" align="center"><font face="'Verdana','Courier'" size="-2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31,</b></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></b></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></b></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2"><b>ASSETS</b></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">CURRENT ASSETS</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Cash</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,679,666</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,191,176</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Investment in available-for-sale
securities</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">2,307,424</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">3,266,753</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Trade receivables, less allowance for doubtful accounts</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of $30,822 and $26,500, respectively</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">700,217</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">730,577</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">889,556</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">922,610</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Other current assets</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">198,519</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">127,177</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Prepaid income taxes</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</u></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;74,606</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">TOTAL CURRENT ASSETS</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">8,775,382</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">8,312,899</font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">PROPERTY AND EQUIPMENT, NET</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">1,601,918</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">1,615,994</font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">INVESTMENTS</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,910,805</u></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17,202,689</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2"><b>TOTAL ASSETS</b></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24,288,105</u></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27,131,582</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2"><b>LIABILITIES AND SHAREHOLDERS' EQUITY</b></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">CURRENT LIABILITIES</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">108,713</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">108,482</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Customer deposits</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">6,736</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">6,493</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Accrued expense</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">294,011</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">234,212</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Deferred taxes</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">0</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">1,047,900</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Accrued income taxes</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;430,461</u></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">TOTAL CURRENT LIABILITIES</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;839,921</u></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,397,087</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">DEFERRED INCOME TAXES</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,120,325</u></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,879,400</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">SHAREHOLDERS' EQUITY</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Common stock par value $0.10 per share;</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;authorized 10,000,000 shares; issued</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,112,810 and 1,990,108 shares, respectively</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">211,281</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">207,711</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">988,378</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">985,410</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Retained earnings</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">7,285,168</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2">6,391,246</font></td>
	<td width="80"></td></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,843,032</u></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,270,728</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2">TOTAL SHAREHOLDERS' EQUITY</font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17,327,859</u></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,855,095</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="80"></td>
	<td width="350" align="left"><font face="'Verdana','Courier'" size="-2"><b>TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</b></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24,288,105</u></font></td>
	<td width="120" align="right"><font face="'Verdana','Courier'" size="-2"><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27,131,582</u></font></td>
	<td width="80"></td></tr></table>

<br><br><br><br>

<hr size="1">

<br><br><br>

<center><font face="'Verdana','Courier'" size="-2"><b>ELECTRO-SENSORS, INC. AND SUBSIDIARY COMPANIES</b></font></center><br>
<center><font face="'Verdana','Courier'" size="-2"><b>CONSOLIDATED CASH FLOW  STATEMENTS</b></font></center>
<center><font face="'Verdana','Courier'" size="-2"><b>(Unaudited)</b></font></center><br><br>

<table width="760" cellpadding="2">
<tr>
    <td width="80"></td>
	<td width="350" align="left"></td>
	<td width="240" align="center"><font face="'Verdana','Courier'" size="-2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Three Months Ended<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 31,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></b></font></td>
	<td width="80"></td></tr></table>

<table width="760" cellpadding="2">
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></b></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><b><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></b></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">CASH FLOW FROM OPERATING ACTIVITIES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Cash received from customers</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;1,364,563</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;1,403,817</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Cash paid to suppliers and employees</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,248,646)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,418,154)</font></td>
	<td width="68"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Interest received</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;47,323</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28,694</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;163,240</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14,357</u></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">CASH FLOW FROM INVESTING ACTIVITIES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Proceeds from Sale of Investments</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">1,426,566</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">0</font></td>
	<td width="68"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Purchase of property and equipment</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14,286</u>)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20,456</u>)</font></td>
	<td width="68"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,412,280</u></font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20,456</u>)</font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">CASH FLOW FROM FINANCING ACTIVITIES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Dividends paid</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(93,568)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(58,798)</font></td>
	<td width="68"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Proceeds from issuance of stock</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6,538</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,812</u></font></td>
	<td width="68"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) financing activities</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(87,030</u>)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(46,986</u>)</font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in cash</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,488,490</u></font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(53,085</u>)</font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">CASH AND CASH EQUIVALENTS</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Beginning</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,191,176</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,507,689</u></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Ending</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,679,666</u></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,454,604</u></font></td>
	<td width="80"></td></tr></table>

<br><br>

<table width="760" cellpadding="2">
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">Net income</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;985,695</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;163,976</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">Adjustments to reconcile net income to net cash provided by operating activities:</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Depreciation and amortization</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">28,362</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">34,848</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Provision for losses on trade receivables</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(4,300)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(7,900)</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase(decrease) in:</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade receivables</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(34,704)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(74,263)</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(33,054)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(18,538)</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">71,342</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">35,421</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid income taxes</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(74,606)</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">125,609</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase(decrease) in:</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">231</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(2,130)</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer deposits</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">243</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2">(294,420)</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">59,799</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">84,813</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued income taxes</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">430,461</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">1,941</font></td>
	<td width="80"></td></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,266,229</u>)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(35,000</u>)</font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">Net cash provided by operating activities</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">163,240</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2">14,357</font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">NON-CASH INVESTING AND FINANCING ACTIVITIES</font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td align="right" width="120"><font face="'Verdana','Courier'" size="-2"></font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">&nbsp;&nbsp;&nbsp;Unrealized gain(loss) on marketable securities</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,200,908</u>)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,634,978</u>)</font></td>
	<td width="80"></td></tr>
<tr></tr>
<tr></tr>
<tr>
    <td width="80"></td>
	<td align="left" width="350"><font face="'Verdana','Courier'" size="-2">Total non-cash investing and financing activities</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3,200,908</u>)</font></td>
	<td align="right" width="126"><font face="'Verdana','Courier'" size="-2"><u>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,634,978</u>)</font></td>
	<td width="80"></td></tr></table>

<br><br><br><br>

<hr size="1">

<br><br><br>

<p><font face="'Verdana','Courier'" size="-2"><b>Item 2.  Management's Discussion and Anaylysis of Financial Condition and Results of Operation</b></font></p>

<p><font face="'Verdana','Courier'" size="-2"><b>Results of Operation</b></font></p>

<p><font face="'Verdana','Courier'" size="-2">The Company's sales for the first quarter decreased 24.6% to $1,342,344 compared to $1,780,400 the first quarter of 2000.  This decrease resulted principally in the Controls Division where, during the first
quarter of 1999, the speed monitoring division completed a large shipment to a significant end user.</font></p>

<p><font face="'Verdana','Courier'" size="-2">AutoData sales of its scannable office product decreased when compared to 2000.  The scannable office product was released in March 2000, and therefore accounted for a significant amount of sales for this
division in the prior year.  AutoData will continue to develop a marketing strategy in order to establish itself in an evolving market.</font></p>

<p><font face="'Verdana','Courier'" size="-2">The Company's wholly-owned subsidiary, Microflame, Inc., has experienced a 42.1% decrease in sales during the first quarter of 2001.  The decline in sales reflects the discontinued purchases by its largest
customer, Radio Shack.  During 2000, the Company continued efforts to reduce Microflame's operating costs.</font></p>

<p><font face="'Verdana','Courier'" size="-2">Cost of sales and gross margin remained the same as a percentage of sales when compared to the first quarter of 2000.</font></p>

<p><font face="'Verdana','Courier'" size="-2">Operating expenses decreased 14.1% during the first quarter of 2001 when compared to the same period of 2000.  All operating expense categories experienced a decrease during this three month period.  The
decrease is attributable to a reduction in staffing and decreased research and development in the AutoData division, as well as continued efforts in controlling costs company-wide.</font></p>

<p><font face="'Verdana','Courier'" size="-2">ESI Investment continues to provide an alternative source for earnings for the Company through investments in marketable securities.  The Company recognizes gains and losses when realized and are determined
on the basis of the specific securities sold.</font></p>

<p><font face="'Verdana','Courier'" size="-2"><b>Liquidity and Capital Resources</b></font></p>

<p><font face="'Verdana','Courier'" size="-2">The Company continues to generate strong cash flows from operations.  Working capital and funds for capital expenditures have been provided through current earnings. These funds have been placed in secure
short-term investments.  The funds are used primarily for dividend distribution, working capital needs and general corporate purposes, which may include acquisitions.  </font></p>

<p><font face="'Verdana','Courier'" size="-2">The Company does not anticipate the need for additional working capital from outside sources.  Also, the Company declared a second quarter cash dividend payable in June 2001.</font></p>

<p><font face="'Verdana','Courier'" size="-2">During the first three months ended March 31, 2001, working capital increased $1,020,000 to a total of $7,936,000.  This increase in working capital resulted primarily from proceeds obtained from the sale of
investments.  Accounts receivable and inventories decreased due to decreased sales.  </font></p>

<br><br><br><br>

<hr size="1">

<br><br><br>

<p><b><font face="'Verdana','Courier'" size="-2">PART II - OTHER INFORMATION</font></b></p>

<p><b><font face="'Verdana','Courier'" size="-2">Item 1.  Legal Proceedings</font></b></p>
<p><font face="'Verdana','Courier'" size="-2">There were no material developments in previously reported legal proceedings.</font></p>

<p><b><font face="'Verdana','Courier'" size="-2">Item 2.  Changes in Securities and Use of Proceeds</font></b></p>
<font face="'Verdana','Courier'" size="-2">No changes have been made in any registered securities.</font></p>

<p><b><font face="'Verdana','Courier'" size="-2">Item 3.  Defaults Upon Senior Securities</font></b></p>

<p><font face="'Verdana','Courier'" size="-2">No event constituting a default has occurred respecting any senior security of the Registrant.</font></p>

<p><b><font face="'Verdana','Courier'" size="-2">Item 4.  Submission of Matters to a Vote of Security Holders</font></b></p>

<p><font face="'Verdana','Courier'" size="-2">No matters were submitted to a vote of security holders during the period covered by this Form 10-QSB.</font></p>

<p><b><font face="'Verdana','Courier'" size="-2">Item 5.  Other Information</font></b></p>

<p><font face="'Verdana','Courier'" size="-2">The Company wishes to caution investors that the following important factors, among others, in some cases have affected and in the future could affect the Company's actual results of operations and cause such
results to differ materially from those anticipated in forward-lookng statements made in this document and elsewhere by or on behalf of the Company:  the uncertainty of market acceptance of products of the Company's AutoData Systems division which is in
the continuing stage of development; fluctuations and declines in operating results of the Company's Drive Control Systems, Speed Monitoring and Microflame divisions; fluctuations in the value of the Company's investments, particularly PPT Vision and
August Technology, and sales of such investments; competition, particularly with regard to the pricing of products; the Company's ability to develop new products; and dependence on suppliers.  For additional information, please see the Company's Annual
Report on Form 10-KSB.</font></p>

<p><b><font face="'Verdana','Courier'" size="-2">Item 6.  Exhibits and Reports on Form 8-K</font></b></p>

<p><font face="'Verdana','Courier'" size="-2">(a)&nbsp;&nbsp;Exhibits<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No exhibits are attached to this filing of Form 10-QSB.<br>(b)&nbsp;&nbsp;Reports on Form 8-K<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No reports
on Form 8-K were filed during the quarter ended March 31, 2001.</font></p>

<br><br><br><br>

<hr size="1">

<br><br><br>

<center><b><font face="'Verdana','Courier'" size="-2">SIGNATURES</font></b></center>

<p><font face="'Verdana','Courier'" size="-2">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.</font></p>

<table widht="760" cellpadding="2">
<tr>
	<td width="390"></td>
	<td width="366" align="left"><font face="'Verdana','Courier'" size="-2">ELECTRO-SENSORS, INC.</font></td></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr></tr>
<tr>
	<td width="390" align="left"><font face="'Verdana','Courier'" size="-2">Date:&nbsp;&nbsp;May 15, 2001</font></td>
	<td width="366" align="left"><font face="'Verdana','Courier'" size="-2">By:&nbsp;&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Bradley D. Slye&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></td></tr>
<tr>
	<td width="390"></td>
	<td width="366" align="left"><font face="'Verdana','Courier'" size="-2">Bradley D. Slye, President</font></td></tr>
<tr>
	<td width="390"></td>
	<td width="366" align="left"><font face="'Verdana','Courier'" size="-2">(Principal Financial Officer)</font></td></tr></TABLE>


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