8-K

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                                   FORM 8-K


               Current Report Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934


      Date of Report (Date of earliest event reported): February 3, 2001



                     PACIFIC AEROSPACE & ELECTRONICS, INC.

             (Exact name of registrant as specified in its charter)


           Washington                 0-26088               91-1744587
         (State or other            (Commission            (IRS Employer
         jurisdiction of            File Number)        Identification No.)
         incorporation or
         organization)

430 Olds Station Road, Third Floor, Wenatchee, WA                       98801
(Address of Principal Executive Offices)                              (Zip Code)

Registrant's telephone number,
including area code:                                              (509) 667-9600


Item 5.  Other Events
- ---------------------

Financing Commitment Letter
- ---------------------------

On February 5, 2001, Pacific Aerospace issued a press release announcing that we
have received a commitment letter from an institutional lender, indicating that
the lender intends to provide us with $15 million of financing.  The lender and
Pacific Aerospace plan to close the financing transaction before the end of
February 2001. The commitment letter, which was executed on February 3, 2001, is
subject to several conditions.  These conditions include the negotiation,
execution and delivery of definitive documents, including without limitation
notes, warrants, and other related documents, the lender's completion of its due
diligence, and the absence of any material adverse change in our business,
financial condition or prospects.  The lender acknowledged in the commitment
letter that it has already conducted substantial business due diligence with
respect to Pacific Aerospace.

We would use the proceeds of the financing to refinance our existing lines of
credit in the U.S. and the U.K., to pay a $3.6 million interest payment on our
outstanding 11 1/4% senior subordinated notes, and to provide working capital.
The interest payment intended to be cured out of the proceeds of the financing
was due on February 1, 2001, but we did not make the payment on that date
because we did not have sufficient cash to do so.  The indenture governing our
11 1/4% senior subordinated notes provides a 30-day grace period before an event
of default is deemed to occur.  The grace period will end on March 3, 2001.  Our
goal is to close the proposed financing transaction before that date in order to
cure the interest payment before an event of default occurs.

Under the terms of the commitment letter, Pacific Aerospace and its subsidiaries
would issue $15 million of senior secured notes to the lender, or funds and
accounts managed or advised by it.   The notes would have a term of two years.
The notes would bear interest at 18% per annum, payable quarterly.  We would
have the option to defer and accrue a portion of the interest, up to 5% per
annum, for up to a year at the time of any interest payment.  The notes would be
secured by the assets of Pacific Aerospace and its subsidiaries.  We would be
permitted to repay the notes at any time without a penalty, and we would be
required to repay $7.5 million of the notes upon the sale of our U.K.
subsidiary, Aeromet International PLC.

Under the terms of the commitment letter, we would also issue warrants to
purchase shares of our common stock to the lender or funds and accounts managed
or advised by it, at a nominal exercise price.  The number of shares covered by
the warrants is expected to approximate 8% of our common stock outstanding or
issuable, on a fully diluted basis, at the time of closing.

                                       2


Line of Credit Extension
- ------------------------

Our U.S. operating line of credit expired on September 5, 2000, and had
previously been extended through February 5, 2001.  On February 7, 2001, our
current U.S. lender extended the line of credit through March 5, 2001.   Due to
our continued losses, our current U.S. lender has decided not to renew our line
of credit once we have found a replacement lender.  We would use a portion of
the proceeds of the proposed financing announced on February 5, 2001 and
described above to repay our U.S. line of credit.  In addition, our U.K. line of
credit was previously extended through February 28, 2001, and we would use a
portion of the proceeds of the proposed financing to repay that line of credit.
If we are unable to renew or replace our credit lines, we may not have enough
cash to fund or sustain our current operations or to meet our obligations as
they become due, including paying our February 1, 2001 interest payment within
the grace period ending on March 3, 2001.  In that event, we could be forced to
seek protection from creditors under the bankruptcy laws.

Item 7.  Financial Statements and Exhibits
- ------------------------------------------

(a)    Financial Statements
       --------------------

None required.

(b)    Pro Forma Financial Information
       -------------------------------

Not applicable.

(c)    Exhibits
       --------

The following are filed as exhibits to this current report:

99.1   Press Release, dated February 5, 2001

99.2   Modification and/or Extension Agreement, dated February 7, 2001, between
       Pacific Aerospace & Electronics, Inc. and KeyBank National Association.

                                       3


                                  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 hereunto duly authorized.


                                  PACIFIC AEROSPACE & ELECTRONICS, INC.

                                  By: /s/ Donald A. Wright
                                     -----------------------------------------
                                     Donald A. Wright, Chief Executive Officer
                                     & President



Dated:  February 8, 2001

                                       4


                                 EXHIBIT INDEX


Exhibit
Number    Description


99.1      Press Release, dated February 5, 2001

99.2      Modification and/or Extension Agreement, dated February 7, 2001,
          between Pacific Aerospace & Electronics, Inc. and KeyBank National
          Association.

                                       5

EX-99.1

                                                                    EXHIBIT 99.1
FOR IMMEDIATE RELEASE


CONTACTS:  Tom Barrows                          Michael Irving
           Investor Relations                   Investor Relations
           Pacific Aerospace & Electronics      Madison & Wall Worldwide
           (509) 667-9600                       (407) 682-2001

     PACIFIC AEROSPACE & ELECTRONICS, INC. OBTAINS $15 MILLION FINANCING
                                  COMMITMENT

WENATCHEE, WA - February 5, 2001 - Pacific Aerospace & Electronics, Inc.
(Nasdaq: PCTH), a diversified manufacturing company specializing in metal and
ceramic components and assemblies, announced today that it has received a
commitment letter from an institutional lender, indicating that the lender
intends to provide $15 million of financing to the Company.  The lender and the
Company plan to close the financing transaction before the end of February, and
the Company intends to use the proceeds to refinance its existing lines of
credit in the U.S. and the U.K., to pay an interest payment on its outstanding
senior subordinated notes that was due on February 1, 2001, and to provide
working capital.

"Assuming that all goes as planned, this financing will allow us to make the
February 1 payment on our senior subordinated notes before the 30-day grace
period expires," said Don Wright, President and CEO of the Company.  "It will
also permit us to repay our banks and provide us with additional working
capital.  We anticipate that this will help us bridge the gap while we proceed
with our efforts to sell Aeromet International."

Under the terms of the commitment letter, the Company and its subsidiaries would
issue $15 million of senior secured notes to the lender, with a term of two
years.  The notes would bear interest at 18% per annum, payable quarterly.  The
Company would have the option to defer and accrue a portion of the interest, up
to 5% per annum, for up to a year at the time of any interest payment.  The
notes would be secured by the assets of the Company and its subsidiaries.  The
Company would be permitted to repay the notes at any time without a penalty, and
the Company would be required to repay $7.5 million of the notes upon the sale
of Aeromet International.  The Company would also issue warrants to purchase
shares of the Company's common stock at a nominal exercise price. The number of
shares covered by the warrants is expected to approximate 8% of the Company's
common stock, on a fully diluted basis.  The commitment letter is subject to
several conditions, including the negotiation and execution of the notes,
warrants, and other related documents, the lender's completion of its due
diligence, and the absence of any material adverse change in the Company's
financial condition.  With respect to the due diligence condition, the lender
acknowledged in the commitment letter that it has already conducted substantial
business due diligence with respect to the Company.

Pacific Aerospace & Electronics Inc. is an international engineering and
manufacturing company specializing in technically demanding component designs
and assemblies for global leaders in the aerospace, defense, electronics,
medical, telecommunications, energy and transportation industries. The Company
utilizes specialized manufacturing techniques, advanced materials science,
process engineering and proprietary technologies and processes to its
competitive advantage. Pacific Aerospace & Electronics has approximately 1,000
employees worldwide and is organized into three operational groups -- U.S.
Aerospace, U.S. Electronics and European Aerospace. More information may be
obtained by contacting the company directly or by visiting its Web site at
www.pcth.com.


Forward-looking statements in this release concerning trends or anticipated
results are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Actual results could differ materially
from those stated or implied in the forward-looking statements. The forward-
looking statements in this release are not guarantees of future performance and
are subject to risks and uncertainties related to the Company's operations and
its ability to obtain sufficient cash if and when needed. These risks and
uncertainties include, but are not limited to, competitive factors (including
the possibility of increased competition or technological development,
competitors, and price pressures); legal factors (such as limited protection of
the Company's proprietary technology and changes in government regulation);
financial factors (such as the Company's significant debt load); and the
Company's dependence on key personnel and significant customers. More
information about potential factors that could affect the Company's financial
results is included in the Company's filings with the Securities and Exchange
Commission. All forward-looking statements included in this release are based on
information available to the Company as of the date of this release, and the
Company assumes no obligation to update any such forward-looking statements.

EX-99.2

                                                                    EXHIBIT 99.2

                    MODIFICATION AND/OR EXTENSION AGREEMENT

Date:         February 7, 2001                                      JEP-AG

Borrower(s):  PACIFIC AEROSPACE & ELECTRONICS, INC.

Lender:       KEYBANK NATIONAL ASSOCIATION

Note:         Dated September 22, 1998, in the principal amount of
              $6,300,000.00, including any and all amendments thereto.

Loan #:       31-357577-3000009903

     FOR VALUE RECEIVED, Borrower and Lender hereby agree to modify the above
referenced Loan and Promissory Note and/or Loan Agreement as follows:

1.   MODIFICATION AND/OR EXTENSION PROVISIONS

          .    The maturity date of the Loan is hereby extended to March 5,
               2001.

2.   CONDITIONS.  The modifications and/or extension described above are subject
to and conditioned upon Borrower's full satisfaction of all of the following
conditions on or before the date first stated above, time being of the essence.

     A.   There shall be no uncured event of default under the Loan, nor any
          event or condition which with notice or the passage of time would be
          an event of default thereunder.

     B.   Borrower shall deliver to Lender a fully executed original of this
          Modification and/or Extension Agreement

     C.   All expenses incurred by Lender in connection with this Agreement
          (including without limitation, attorney fees, recording charges,
          charges for title policy update(s), escrow charges, costs of obtaining
          updated or additional appraisal(s) or collateral valuations, if
          required by Lender) shall be paid by Borrower.

     D.   Borrower shall comply with the following additional conditions:

          .    No additional conditions apply.

3.   GENERAL PROVISIONS.  Except as modified above, all other provisions of the
Promissory Note and any other documents securing or relating to the Loan (the
"Loan Documents") remain in full force and effect. All security given for the
Loan and all guarantees of the Loan (as applicable) shall continue in full
force. Borrower warrants and represents to Lender that it has full right, power
and authority to enter into this agreement and to perform all its obligations
hereunder, and that all information and materials submitted to Lender in
connection with this modification are accurate and complete. Borrower warrants
that no default exists under the Loan Documents. Borrower reaffirms its
obligation to pay the Loan in full and reaffirms the validity and enforceability
of the Loan Documents, without set-off, counterclaim or defense.

                                      -1-


ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.

LENDER:                                    BORROWER:

KEYBANK NATIONAL ASSOCIATION               PACIFIC AEROSPACE & ELECTRONICS, INC.

By: /s/ John C. Thoren                     By: /s/ Donald A. Wright
    ------------------------                   ---------------------------------
John C. Thoren, Vice President             Donald A. Wright, CEO & President

                                      -2-