8-K

                                  UNITED STATES
                       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: January 6, 2003



                                APA OPTICS, INC.
             (Exact name of registrant as specified in its charter)



            MINNESOTA                0-16106                  41-1347235
(State of other jurisdiction  (Commission File No.) (IRS Employer Identification
        of incorporation)                                       Number)


              2950 NE 84TH LANE, BLAINE, MN                      55449
       (Address of principal executive offices)                (Zip Code)


   Registrant's telephone number, including area code:      (763) 784-4995

   (Former name, former address and former fiscal year, if changed since last
                                  report): N/A



ITEM 5.   OTHER EVENTS

     On January 3, 2003, we signed a non-binding term sheet to acquire Computer
System Products, Inc.  Completion of the acquisition is subject to satisfaction
of significant conditions precedent.  See the press release included in this
report as Exhibit 99.1.



ITEM 7.   EXHIBITS

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

99.1                       Press Release dated January 6, 2003


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                                   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.


Dated:  January 6, 2003           APA OPTICS, INC.



                                       By /s/  Anil K. Jain
                                          ------------------------------------
                                         Anil K. Jain, Chief Executive Officer
                                         Authorized Signatory


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EX-99.1

EXHIBIT 99.1


[GRAPHIC OMITTED]


     APA OPTICS ANNOUNCES NON-BINDING TERM SHEET TO PURCHASE COMPUTER SYSTEMS
                                  PRODUCTS, INC

     MINNEAPOLIS (January 6, 2003) - APA Optics (Nasdaq/NM.APAT) today announced
     that it has signed an exclusive non-binding term sheet with Computer System
     Products, Inc.(CSP), a privately held company, for purchase of all of the
     stock of CSP from the holders thereof for cash, APA common stock and common
     stock warrants, and assumption of certain specific liabilities. The closing
     of the purchase is dependent upon signing of a detailed purchase agreement
     and satisfactory completion of due-diligence, to be completed within 60
     days from signing of the term sheet.

     CSP, Inc. designs, manufactures and markets standard and custom, fiber
     optic assemblies, copper cable assemblies, value-added fiber optic frames,
     panels and modules for the data communication and telecommunication
     industries. CSP's products enable its customers to send voice, video and
     data signals efficiently across all types of networks while maintaining the
     highest level of signal integrity. Anil Jain, PhD, APA's founder,
     president, and chief executive officer, stated that, "We are very pleased
     with the opportunity of acquiring CSP, Inc. due to our common interests in
     the fiber optic communications industry. The purchase will result in
     expanded product portfolio and customer base for our business activities."

     APA  Optics,  Inc.  designs, manufactures and markets advanced products for
the  fiber optic communications, optoelectronics and laser industries, including
Dense  Wavelength  Division  Multiplexer  (DWDM),  ultraviolet  (UV)  detectors,
Nitride  epitaxial  layers  and  custom  optics.  APA's  Internet  address  is
http://www.apaoptics.com.
- ------------------------



APA Optics, Inc. Contact Information:
- -------------------------------------

Anil K. Jain
Chief Executive Officer and Chief Financial Officer
anil@apaoptics.com
- ------------------
763-784-4995


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