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): August 1, 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
- ---------------------

On August 1, 2001, the Company issued a press release, which is attached to this
current report as Exhibit 99.1 and incorporated by reference in this current
report.

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

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

None required.

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

Not applicable.

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

The following is filed as an exhibit to this current report:

99.1 Press release dated August 1, 2001.


                                   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/ Sheryl A. Symonds
                                ------------------------------------------
                                Sheryl A. Symonds
                                V.P. Administration & General Counsel, Secretary

Dated:  August 1, 2001

                                       2


                                 EXHIBIT INDEX

Exhibit
Number    Description

99.1      Press release dated August 1, 2001.

                                       3

EX-99.1

                                                                    EXHIBIT 99.1
                                                                    ------------



FOR IMMEDIATE RELEASE


CONTACTS:  Nick Gerde
           Chief Financial Officer
           Pacific Aerospace & Electronics
           (509) 667-9600

         PACIFIC AEROSPACE & ELECTRONICS, INC. DELAYS INTEREST PAYMENT

WENATCHEE, WA - August 1, 2001 - Pacific Aerospace & Electronics, Inc. (Nasdaq:
PCTH), a diversified manufacturing company specializing in metal and ceramic
components and assemblies, announced today that it will not make a scheduled
$3.6 million interest payment on its outstanding senior subordinated notes
today. Under the terms of the indenture governing the notes, the Company has a
30-day grace period in which to make the interest payment before an event of
default occurs.

"We are working closely with our lenders, and we hope to reach a debt
restructuring plan with them soon," said Don Wright, President and CEO of the
Company.

The Company also announced today that it has retained Jefferies & Company, Inc.
to act as its financial advisor.

If the Company determines that it will not be able to make the interest payment
by the end of the 30-day grace period, or if it cannot reach an acceptable debt
restructuring plan with its lenders, the Company may be forced to seek
protection from creditors under the bankruptcy laws. In that event, the Company
would use its best efforts to negotiate with its creditors and to reorganize the
Company quickly, efficiently, and in a manner aimed at obtaining a positive
outcome and preventing disruption for the Company's customers, suppliers, and
employees.

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 900
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.