--------------------------------------------------------------------------------
     As filed with the Securities and Exchange Commission on January 25, 2000 -
                                                      Registration No. _________

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM S-8

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                            APPLIED FILMS CORPORATION
             (Exact name of registrant as specified in its charter)

         Colorado                                         84-1311581
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                9586 I-25 Frontage Road, Longmont, Colorado 80504
               (Address of Principal Executive Offices) (Zip Code)

          Applied Films Corporation Outside Director Stock Option Plan
                            (Full Title of the Plan)

    Lawrence D. Firestone, 9586 I-25 Frontage Road, Longmont, Colorado 80504,
                                 (303) 774-3246
           (Name, address, and telephone number of agent for service)

                          Copies of Communications to:
                             William J. Lawrence III
                    Varnum, Riddering, Schmidt & Howlett LLP
                      333 Bridge Street, N.W., P.O. Box 352
                        Grand Rapids, Michigan 49501-0352
                                 (616) 336-6000

                         CALCULATION OF REGISTRATION FEE
<TABLE>
=======================================================================================================================
                                                        Proposed                Proposed
                                                         Maximum                 Maximum                 Amount of
  Title of Securities         Amount Being           Offering Price             Aggregate              Registration
   Being Registered            Registered             Per Share(1)          Offering Price(1)             Fee(2)
=======================================================================================================================
<S>                           <C>                       <C>                     <C>                      <C>
Common Stock                  24,000 shares             $14.97                  $359,280                 $95
=======================================================================================================================
</TABLE>
(1)      For the purpose of  computing  the  registration  fee only,  the price
         shown is based upon the price of $14.97 per share,  the average of the
         high and low  sales  prices  for the  Common  Stock of  Applied  Films
         Corporation in the NASDAQ  National Market System on January 21, 2000,
         in accordance with Rule 457(h).
(2)      Registration  fee  is  calculated  on the  basis  of  1/37.8787  of 1%
         (.000264) of the proposed maximum aggregate offering price of $359,280.

Pursuant  to  Rule  416(a)  of the  General  Rules  and  Regulations  under  the
Securities Act of 1933, this Registration  Statement shall cover such additional
securities as may be offered or issued to prevent dilution  resulting from stock
splits, stock dividends or similar transactions.
================================================================================
<PAGE>
                                     PART I
              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS


     Information  required  by  Part  I to be  contained  in the  Section  10(a)
prospectus is omitted from this  Registration  Statement in accordance with Rule
428 under the Securities Act of 1933 (the "Securities Act") and the Note to Part
I of Form S-8.


                                     PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


Item 3.  Incorporation of Documents by Reference

     The following  documents filed with the Securities and Exchange  Commission
(the "Commission") are incorporated herein by reference:

          (a) The Annual  Report on Form 10-K and 10-K/A of the  Registrant  for
     the year ended July 3, 1999.

          (b) All other reports filed  pursuant to Section 13(a) or 15(d) of the
     Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the
     end of the fiscal year covered by the Annual  Report on Form 10-K  referred
     to in (a) above.

          (c) The description of the Registrant's  Common Stock contained in the
     Registrant's  Registration  Statement on Form 8-A filed pursuant to Section
     12(b) of the Exchange Act,  including  any  amendments or reports filed for
     the purpose of updating such description.

     All  reports  and  other  documents  subsequently  filed by the  Registrant
pursuant to Sections  13(a),  13(c),  14 and 15(d) of the Exchange Act, prior to
the filing of a  post-effective  amendment  which  indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold,  shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents.  Any statement
contained in a document  incorporated  or deemed to be incorporated by reference
herein  shall be  deemed to be  modified  or  superseded  for  purposes  of this
Registration Statement to the extent that a statement contained herein or in any
other  subsequently  filed document which also is  incorporated  or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded  shall not be deemed,  except as so modified
or superseded, to constitute a part of this Registration Statement.

Item 4.  Description of Securities

     The class of securities to be offered is registered under Section 12 of the
Exchange Act.

Item 5.  Interests of Named Experts and Counsel

     Not Applicable.

Item 6.  Indemnification of Directors and Officers

     Section 7-109-102  through  7-109-110 of the Colorado Business  Corporation
Act (the "Act") grant the  Registrant  broad  powers to indemnify  any person in
connection with legal  proceedings  brought against him by reason of his present
or past  status as an officer  or  director  of the  Registrant,  provided  with
respect to conduct in an official

                                       S-2
<PAGE>
capacity with the Registrant,  the person acted in good faith and in a manner he
reasonably believed to be in the best interests of the Registrant,  with respect
to all other conduct, the person believed the conduct to be in or not opposed to
the best interests of the Registrant, and with respect to any criminal action or
proceeding,  the  person had no  reasonable  cause to believe  his  conduct  was
unlawful.   Indemnification  is  limited  to  reasonable  expenses  incurred  in
connection with the proceeding. No indemnification may be made (i) in connection
with a proceeding  by or in the right of the  Registrant in which the person was
adjudged  liable  to the  Registrant;  or  (ii) in  connection  with  any  other
proceedings  charging  that the person  derived an  improper  personal  benefit,
whether or not involving action in an official capacity, in which proceeding the
person was judged  liable on the basis  that he  derived  an  improper  personal
benefit,  unless  and only to the  extent  the court in which  such  action  was
brought or another court of competent  jurisdiction  determines upon application
that, despite such adjudication, but in view of all relevant circumstances,  the
person is fairly and reasonably entitled to indemnity for reasonable expenses as
the court  deems  proper.  In  addition,  to the extent  that any such person is
successful  in the  defense  of any such legal  proceeding,  the  Registrant  is
required by the Act to Indemnify him against reasonable expenses.

     The Registrant's  Amended and Restated  Articles of  Incorporation  contain
provisions  which permit the  Registrant to indemnify its officers and directors
to the fullest extent  permitted by the Colorado  Business  Corporation Act. The
Registrant  has  entered  into  indemnification  agreements  with  each  of  its
directors and certain of its officers providing for similar indemnification.  In
addition to the available indemnification, the Registrant's Amended and Restated
Articles of  Incorporation  limit the  personal  liability of the members of its
Board of Directors,  subject to certain  exceptions,  for monetary  damages with
respect to claims by the Registrant or its shareholders.

     The  Registrant's  Amended and Restated  Bylaws provide that the Registrant
may  purchase  and  maintain  insurance  on behalf of its  directors,  officers,
employees, fiduciaries and agents against liability asserted against or incurred
by such persons in any such capacity.

Item 7.  Exemption from Registration Claimed

     Not Applicable.

Item 8.  Exhibits

     Reference is made to the Exhibit Index which appears on page S-6.

Item 9.  Undertakings

     The undersigned registrant hereby undertakes:

          (a) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this Registration Statement:

               (i) To include any prospectus required by Section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
          after the effective  date of the  Registration  Statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate,  represents a  fundamental  change in the  information  set
          forth in the Registration  Statement.  Notwithstanding  the foregoing,
          any increase or decrease in volume of securities offered (if the total
          dollar  value of  securities  offered  would not exceed that which was
          registered)  and  any  deviation  from  the  low  or  high  and of the
          estimated  maximum  offering  range  may be  reflected  in the form of
          prospectus  filed with the  Commission  pursuant to Rule 424(b) if, in
          the aggregate,  the changes in volume and price represent no more than
          20 percent change in the maximum aggregate

                                       S-3
<PAGE>
          offering  price set forth in the  "Calculation  of  Registration  Fee"
          table in the effective Registration Statement;

               (iii) To include any  material  information  with  respect to the
          plan of  distribution  not  previously  disclosed in the  Registration
          Statement  or  any  material   change  to  such   information  in  the
          Registration Statement;  provided, however, that paragraphs (a)(i) and
          (a)(ii)  do not apply if the  Registration  Statement  is on Form S-3,
          Form S-8, or Form F-3, and the information  required to be included in
          a  post-effective  amendment  by  those  paragraphs  is  contained  in
          periodic  reports  filed by the  Registrant  pursuant to Section 13 or
          Section 15(d) of Securities Exchange Act of 1934 that are incorporated
          by reference in the Registration Statement.

          (b) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment shall be deemed
     to be a new  Registration  Statement  relating  to the  securities  offered
     therein,  and the offering of such  securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (c) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

     The  undersigned   Registrant  hereby  undertakes  that,  for  purposes  of
determining  any liability  under the Securities Act of 1933, each filing of the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
Registration  Statement  shall  be  deemed  to be a new  Registration  Statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors,  officers and controlling  persons of the
Registrant pursuant to the foregoing  provisions,  or otherwise,  the Registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against  public policy as expressed in the Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the Registrant of expenses incurred
or paid by a director,  officer or  controlling  person of the Registrant in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                       S-4
<PAGE>
                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the  City of  Longmont,  State of  Colorado,  on the 25th day of
January, 2000.

                          APPLIED FILMS CORPORATION


                          By  /s/ Thomas T. Edman
                          Thomas T. Edman, President and Chief Executive Officer


                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS,  that each person whose  signature  appears
below  constitutes and appoints  Thomas T. Edman and Lawrence D. Firestone,  and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution  and  resubstitution,  for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments)  to this  Registration  Statement  and to file  the  same,  with all
exhibits  thereto,  and  other  documents  in  connection  therewith,  with  the
Securities and Exchange Commission and any other regulatory authority,  granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing  required and necessary to be done in and about the
premises,  as  fully  to all  intents  and  purposes  as he might or could do in
person,  hereby  ratifying and  confirming  all that said  attorney-in-fact  and
agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been  signed  below on  January  25,  2000,  by the
following persons in the capacities indicated.


      Signatures                              Title

  /s/ Thomas T. Edman        President, Chief Executive Officer and Director
    Thomas T. Edman          (principal executive officer)

                             Chief Financial Officer and Treasurer (principal
/s/ Lawrence D. Firestone    financial officer and principal accounting officer)
  Lawrence D. Firestone

   /s/ Richard P. Beck       Director
      Richard P. Beck

   /s/ John S. Chapin        Vice President -- Research, Secretary and Director
     John S. Chapin

  /s/ Vincent Sollito, Jr.   Director
    Vincent Sollito, Jr.

    /s/ Chad D. Quist        Director
      Chad D. Quist

  /s/ Cecil Van Alsburg      Director
    Cecil Van Alsburg
<PAGE>
                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


The Board of Directors
Applied Films Corporation

As  independent  public  accountants,  we hereby  consent  to  incorporation  by
reference  in this  registration  statement  of our report  dated July 27, 1999,
included  in Applied  Films  Corporation's  annual  report on Form 10-K and Form
10-K/A (Registration No. 000-23103),  and to all references to our firm included
in this registration statement.


                              /s/ ARTHUR ANDERSEN LLP

Denver, Colorado
   January 24, 2000


                                       S-5
<PAGE>
                                  EXHIBIT INDEX

     The following exhibits are filed as a part of the Registration Statement:




Exhibit
Number      Description of Document

4.1      Applied Films Corporation Outside Director Stock Option Plan

5.1      Opinion of Varnum, Riddering, Schmidt & Howlett LLP with respect to the
         legality of the securities being registered

23.1     Consent of Arthur Andersen LLP - included on page S-6 hereof

23.2     Consent of Varnum, Riddering, Schmidt & Howlett LLP (included in
         opinion filed as Exhibit 5.1)

24.1     Power of Attorney - included on page S-5 hereof


                                       S-6
<PAGE>
                            APPLIED FILMS CORPORATION
                       OUTSIDE DIRECTOR STOCK OPTION PLAN


     1.  Name  and  Purpose.  This  plan  shall  be  called  the  Applied  Films
Corporation  Outside  Director  Stock  Option  Plan  (the  "Plan").  The Plan is
intended to encourage stock ownership by nonemployee  directors of Applied Films
Corporation  (the  "Company"),  to provide  such  directors  with an  additional
incentive to manage the Company  effectively  and to  contribute to its success,
and to provide a form of  compensation  which  will  attract  and retain  highly
qualified individuals as members of the Board of Directors of the Company.

     2.  Effective  Date and Term of the Plan.  The Plan shall become  effective
upon its  approval  by the Board of  Directors  of the Company  (the  "Effective
Date").  Options  may not be  granted  under the Plan  after  the  tenth  (10th)
anniversary  of the Effective  Date (the "Term");  provided,  however,  that all
options outstanding as of that date shall remain or become exercisable  pursuant
to their terms and the terms of the Plan.

     3. Administration. The Plan shall be administered by a committee designated
by the Board of  Directors of the Company (the  "Committee")  consisting  of not
less  than two (2)  directors  who shall be  appointed  from time to time by the
Board, each of whom shall qualify as a Nonemployee  Director, as defined in Rule
16b-3(b)(3) of the Securities Exchange Act of 1934, as amended.

     The  Committee  may,  from  time  to  time,   establish  such  regulations,
provisions  and  procedures,  within the terms of the Plan, as in the opinion of
its members may be advisable in the  administration  of the Plan.  The Committee
shall keep minutes of its meetings. A majority of the Committee shall constitute
a quorum, and the acts of a majority of a quorum at any meeting, or acts reduced
to or approved in writing by a majority of the members of the  Committee,  shall
be the valid acts of the Committee.

     The  interpretation  and construction by the Committee of any provisions of
the  Plan or of any  option  granted  pursuant  to the Plan  shall be final  and
binding  upon  the  Company,  the  Board of  Directors  of the  Company  and any
optionee.  No member of the Board of Directors  of the Company or the  Committee
shall be liable for any action or determination  made in good faith with respect
to the Plan or any option granted pursuant thereto.

     4. Participation.  Subject to the limitations  contained in this Section 4,
directors of the Company,  who are neither  contractual nor common law employees
of the Company or any of its subsidiaries,  shall be granted options to purchase
shares of the  Company's  common  stock in  accordance  with the  provisions  of
Section 6 of the Plan and consistent  with the terms and conditions of the Plan.
An optionee may hold more than one option,  but only on the terms and subject to
the restrictions hereafter set forth. Subject to adjustments consistent with the
provisions of

                                   EXHIBIT 4.1
<PAGE>
Subsection  6(h), no one nonemployee  director may be granted  options  covering
more  than a total of  fifteen  percent  (15%) of the  common  stock  originally
reserved  for  issuance  under the Plan,  as  defined  in  Section  5, plus such
increases  therein  as may  from  time  to  time be  approved  by the  Company's
shareholders.

     5. Stock  Available for Options.  Subject to the adjustments as provided in
Subsection  6(h),  the aggregate  number of shares  reserved for purposes of the
Plan shall be 24,000  authorized and unissued shares or issued shares reacquired
by the Company (the  "Shares").  Determinations  as to the number of Shares that
remain  available for issuance  under the Plan shall be made in accordance  with
such rules and  procedures as the Committee  shall  determine from time to time,
which shall be consistent with the  requirements of Rule 16b-3 of the Securities
Exchange  Act of 1934,  as amended,  and such  interpretations  thereof.  If any
outstanding option under the Plan expires or is terminated for any reason before
the end of the Term of the Plan, the shares allocable to the unexercised portion
of such option shall become  available  for the grant of other options under the
Plan.  No shares  delivered  to the  Company  in full or  partial  payment  upon
exercise of an option  pursuant to Subsection 6(d) or in full or partial payment
of any  withholding  tax  liability  permitted  under  Section  9  shall  become
available for the grant of other options under the Plan.

     6. Terms and  Conditions of Option  Agreement.  Options  granted under this
Plan shall be evidenced by agreements  in such form as the Committee  shall from
time to time approve,  which  agreements shall comply with and be subject to the
following conditions:

          (a)  Optionee's  Agreement.  Each optionee  shall agree to continue to
     serve as a director of the  Company for the lesser of at least  twelve (12)
     months  from the date of the grant of the  option or for the  remainder  of
     such optionee's term as a director of the Company. Such agreement shall not
     impose upon the Company,  its Board of Directors,  or its  shareholders any
     obligation to retain the optionee as a director for any period.

          (b) Number of Shares and Term of Options.  Each option shall state the
     number of shares of the Common  Stock of the Company to which it  pertains.
     The term of each option  shall be for a period of not greater than ten (10)
     years from the date of grant of the option.

          (c) Option Price.  The exercise price of each option shall be equal to
     one hundred percent (100%) of the Fair Market Value of the shares of Common
     Stock on the date of the grant of the  option.  If the shares are traded in
     the  over-the-counter  market, the Fair Market Value per share shall be the
     closing  price  on the  national  market  list as  quoted  in the  National
     Association of Securities Dealers Automated  Quotation System ("NASDAQ") on
     the day the  option is  granted  or if no sale of shares  is  reflected  in
     NASDAQ on that day, on the next  preceding day on which there was a sale of
     shares  reflected  in  NASDAQ.   If  the  shares  are  not  traded  in  the
     over-the-counter  market but are listed upon an established  stock exchange
     or  exchanges,  such Fair  Market  Value  shall be deemed to be the closing
     price of the  shares on such stock  exchange  or  exchanges  on the day the
     option is granted or if no sale of the

                                        2
<PAGE>
     shares shall have been made on any stock  exchange on that day, on the next
     preceding day on which there was a sale of the shares.

          (d)  Medium of  Payment.  The  option  price  shall be  payable to the
     Company  either  (i) in United  States  dollars  in cash or by check,  bank
     draft,  or money order  payable to the order of the Company or (ii) through
     the  delivery of shares of the  Company's  Common  Stock with a Fair Market
     Value on the date of the exercise equal to the option price,  provided such
     shares  are  utilized  as  payment to acquire at least 100 shares of Common
     Stock,  or (iii) by a combination of (i) and (ii) above.  Fair Market Value
     will be determined in the manner  specified in Subsection 6(c) except as to
     the date of determination.

          (e)  Exercise of Options.  Except as  provided in  Subsection  6(h) no
     option shall be exercisable, either in whole or in part, prior to the first
     anniversary  of the date of grant of the option.  Subject to the foregoing,
     the Committee  shall have the  authority to  determine,  at the time of the
     grant of each Option, the times at which an Option may be exercised and any
     conditions  precedent  to the  exercise  of an Option.  An option  shall be
     exercisable  upon  written  notice to the Chief  Financial  Officer  of the
     Company,  as to  any  or all  shares  covered  by  the  option,  until  its
     termination or expiration in accordance with its terms or the provisions of
     the Plan. Notwithstanding the foregoing, an option shall not at any time be
     exercisable  with  respect  to less than 100 shares  unless  the  remaining
     shares covered by an option are less than 100 shares. The purchase price of
     the  shares  purchased  pursuant  to an  option  shall be paid in full upon
     delivery to the optionee of  certificates  for such shares.  Exercise by an
     optionee's heir or personal representative shall be accompanied by evidence
     of his or her authority to act, in a form  reasonably  satisfactory  to the
     Company.

          (f)  Options  not  Transferable.  Options  may not be  sold,  pledged,
     assigned,  or transferred in any manner  otherwise than by will or the laws
     of descent or  distribution  to the extent  provided  in  Subsection  6(g).
     During the lifetime of an optionee,  the options shall be exercisable  only
     by the optionee.  Following the death of an optionee,  the options shall be
     exercisable only to the extent provided in Subsection 6(g).

          (g) Termination of Service as Director.

               (i)  Termination  of Service for any Reason Other than Death.  In
          the event an  optionee  shall cease to serve the Company as a director
          for any reason other than such optionee's  death,  each option held by
          such optionee shall remain  exercisable,  subject to prior  expiration
          according to its terms and other limitations  imposed by the Plan, for
          a period of one (1) year following the optionee's cessation of service
          as a  director  of  the  Company.  If the  optionee  dies  after  such
          cessation of service,  the optionee's  options shall be exercisable in
          accordance with Subsection 6(g)(ii) hereof.

               (ii)  Termination of Service for Death.  If an optionee ceases to
          be a director by reason of death,  each  option held by such  optionee
          shall, to the extent

                                        3
<PAGE>
          rights to purchase  shares  under the option have been  accrued at the
          time of death and shall not have been fully exercised, be exercisable,
          in whole or in part, by the personal  representative of the optionee's
          estate or by any  person  or  persons  who have  acquired  the  option
          directly  from the  optionee  by  bequest  or  inheritance  during the
          shorter of the following periods:  (i) the term of the option, or (ii)
          a period  of one (1)  year  from the  death  of such  optionee.  If an
          optionee dies during the extended exercise period following  cessation
          of service  specified in Subsection  6(g)(i) above, such option may be
          exercised  any time within the longer of such  extended  period or one
          (1) year after death,  subject to the prior  expiration of the term of
          the option.

          (h)  Adjustment  in Shares  Covered  by  Option.  The number of shares
     covered  by each  outstanding  option,  and the  purchase  price  per share
     thereof, shall be proportionately  adjusted for any increase or decrease in
     the number of issued and  outstanding  shares  resulting from a split in or
     combination  of shares or the payment of a stock  dividend on the shares or
     any other  increase  or  decrease  in the  number of such  shares  effected
     without receipt of consideration by the Company.

     If the  Company  shall  be the  surviving  corporation  in  any  merger  or
consolidation or if the Company is merged into a wholly owned subsidiary  solely
for purposes of changing the Company's state of incorporation,  each outstanding
option  shall  pertain to and apply to the  securities  to which a holder of the
number of shares subject to the option would have been  entitled.  A dissolution
or liquidation of the Company or a merger or  consolidation in which the Company
is not the surviving  corporation,  except as above  provided,  shall cause each
outstanding  option to terminate,  provided,  that each optionee  shall, in that
event, have the right  immediately prior to such dissolution or liquidation,  or
merger or consolidation  in which the Company is not the surviving  corporation,
to exercise his or her option in whole or in part.

     In the event of a change in the shares as presently  constituted,  which is
limited to a change of all of its authorized shares with par value into the same
number of shares  with a different  par value or without  par value,  the shares
resulting  from any such  change  shall be deemed to be the  shares  within  the
meaning of the Plan.

     To the extent that the foregoing  adjustments relate to stock or securities
of  the  Company,  such  adjustments  shall  be  made  by the  Committee,  whose
determination in that respect shall be final,  binding and conclusive.  Any such
adjustment may provide for the  elimination of any fractional  share which might
otherwise become subject to an option.

     Except as  hereinbefore  expressly  provided in this  Subsection  6(h), the
optionee shall have no rights by reason of any split or combination of shares of
stock of any class or the payment of any stock dividend or any other increase or
decrease  in the  number  of  shares  of stock of any  class or by reason of any
dissolution, liquidation, merger, or consolidation or spinoff of assets or stock
of another corporation, and any issue by the Company of shares of

                                        4
<PAGE>
stock of any class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of stock subject to the option.

     The grant of an option pursuant to the Plan shall not affect in any way the
right  or  power  of  the  Company  to  make   adjustments,   reclassifications,
reorganizations, or changes of its capital or business structure, or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.

          (i) Rights of a  Shareholder.  An  optionee  shall have no rights as a
     shareholder  with respect to any shares  covered by his or her option until
     the date on which the optionee becomes the holder of record of such shares.
     No adjustment shall be made for dividends,  distributions,  or other rights
     for  which  the  record  date is prior to the date on which he or she shall
     have become the holder of record thereof,  except as provided in Subsection
     6(h).

          (j)  Postponement  of  Delivery  of Shares  and  Representations.  The
     Company,  in its  discretion,  may postpone the issuance and/or delivery of
     shares upon any exercise of an option until  completion of the registration
     or other  qualification  of such shares under any state and/or federal law,
     rule or regulation as the Company may consider appropriate, and may require
     any person exercising an option to make such  representations,  including a
     representation  that it is the  optionee's  intention to acquire shares for
     investment and not with a view to  distribution  thereof,  and furnish such
     information as it may consider  appropriate in connection with the issuance
     or delivery of the shares in compliance with applicable  laws,  rules,  and
     regulations.  In such event no shares shall be issued to such holder unless
     and  until  the  Company  is  satisfied  with  the  accuracy  of  any  such
     representations.

          (k) Other Provisions.  The option agreements authorized under the Plan
     shall  contain  such  other  provisions,   including,  without  limitation,
     restrictions  upon the exercise of the option,  as the Committee shall deem
     advisable.

     7. Adjustments in Shares  Available for Options.  The adjustments in number
and kind of shares and the substitution of shares, affecting outstanding options
in accordance with  Subsection  6(h) hereof,  shall also apply to the number and
kind of shares  reserved for issuance  pursuant to the Plan, but not yet covered
by options.

     8. Amendment of the Plan. The Committee, insofar as permitted by law, shall
have the right  from time to time,  with  respect  to any shares at the time not
subject to options,  to suspend or discontinue the Plan or revise or amend it in
any  respect  whatsoever,  and except  that,  without  approval  of the Board of
Directors of the Company, no such revision or amendment shall:

          (a) increase the maximum  number of shares which may be subject to the
     Plan,

          (b) materially  increase the benefits accruing to option holders under
     the Plan,

                                        5
<PAGE>
          (c) decrease the exercise price of options granted under the Plan,

          (d) remove the administration of the Plan from the Committee, or

          (e) permit the  granting  of options  under the Plan after the Term of
     the Plan.

     9.  Withholding  of Taxes.  The Company shall have the right to deduct from
any payment to be made pursuant to this Plan, or to otherwise require,  prior to
the issuance or delivery of any shares of Common Stock,  payment by the optionee
of any federal,  state,  or local taxes  required by law to be withheld.  Unless
otherwise  prohibited  by the  Committee,  an  optionee  may  satisfy  any  such
withholding  tax obligation by any of the following means or by a combination of
such means:

          (a) tendering a cash payment;

          (b)  authorizing  the  Company to withhold  from the shares  otherwise
     issuable to the  optionee a number of shares  having a Fair Market Value as
     of the "Tax  Date,"  less than or equal to the  amount of  withholding  tax
     obligation; or

          (c)  delivering  to  the  Company  unencumbered  shares  owned  by the
     optionee having a Fair Market Value, as of the Tax Date, less than or equal
     to the amount of the withholding tax obligation.

The "Tax  Date"  shall be the date  that the  amount  of tax to be  withheld  is
determined.  Fair Market Value shall be  determined  in the manner  specified in
Subsection 6(c), except as to the date of determination.  An optionee's election
to pay the  withholding  tax  obligation  by either of (b) or (c) above shall be
irrevocable,  may be disapproved  by the Committee,  and must be made either six
months  prior  to the Tax Date or  during  the  period  beginning  on the  third
business day following the date of release of the Company's  quarterly or annual
summary  statement of sales and earnings and ending on the twelfth  business day
following such date.

     10. Right of Board of Directors to Terminate Director's Service. Nothing in
this  Plan or in the  grant of any  option  hereunder  shall in any way limit or
effect the right of the Board of Directors of the Company to remove any director
or otherwise  terminate  his or her service as a director,  pursuant to law, the
Articles of Incorporation, or Bylaws of the Company.

     11.  Application  of Funds.  The proceeds  received by the Company from the
sale of stock pursuant to options will be used for general corporate purposes.

     12. No  Obligation  to Exercise  Option.  The  granting of an option  shall
impose no obligation upon the optionee to exercise such option.

                                        6
<PAGE>
     13. Construction.  This Plan shall be construed under the laws of the State
of Colorado, United States of America.



                                                 APPROVED:

                                                 /s/ Thomas T. Edman
                                                 Thomas T. Edman, President



                                  CERTIFICATION

     This Plan was duly  adopted by the Board of  Directors  of the  Company the
26th day of October, 1999.



                                              /s/ John S. Chapin
                                              John S. Chapin, Secretary


::ODMA\PCDOCS\GRR\380623\3
                                        7
<PAGE>
                                January 25, 2000


Applied Films Corporation
9586 I-25 Frontage Road
Longmont, Colorado 80504

         Re:      Registration Statement on Form S-8 Relating to the Applied
                  Films Corporation Outside Director Stock Option Plan (the
                  "Plan")

Gentlemen:

     With respect to the Registration  Statement on Form S-8 (the  "Registration
Statement)  filed by Applied  Films  Corporation,  a Colorado  corporation  (the
"Company")  with the  Securities  and  Exchange  Commission,  for the purpose of
registering  under the Securities Act of 1933, as amended,  24,000 shares of the
Company's common stock, no par value, for issuance pursuant to the Plan, we have
examined  such  documents  and  questions  of  law  we  consider   necessary  or
appropriate  for the  purpose  of  giving  this  opinion.  On the  basis of such
evaluation,  we advise you that in our opinion the 24,000 shares  covered by the
Registration  Statement,  upon the  exercise  of stock  options,  at the  prices
described in the Registration Statement but not less than the par value thereof,
and upon  delivery of such shares and payment  therefor in  accordance  with the
terms  stated  in the  Plan  and the  Registration  Statement,  will be duly and
legally  authorized,  issued  and  outstanding,  and  will  be  fully  paid  and
nonassessable.

     We hereby  consent  to the  filing of this  opinion  as an  exhibit  to the
Registration  Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required  under Section 7 of
the  Securities Act of 1933, as amended,  or under the rules and  regulations of
the Securities and Exchange Commission relating thereto.

                                   Sincerely,

                    VARNUM, RIDDERING, SCHMIDT & HOWLETT LLP

                           /s/ William J. Lawrence III

                        William J. Lawrence III, Partner

                                   EXHIBIT 5.1
::ODMA\PCDOCS\GRR\383291\2
[{"type": "S-8", "sequence": "1", "secsgml_size_bytes": 40758}]
{"company-data": {"conformed-name": "APPLIED FILMS CORP", "cik": "0001040660", "assigned-sic": "3674", "irs-number": "841311581", "state-of-incorporation": "CO", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-95367", "film-number": "512879"}, "business-address": {"street1": "6797 WINCHESTER CIRCLE", "city": "BOULDER", "state": "CO", "zip": "80301", "phone": "3035301411"}, "mail-address": {"street1": "6797 WINCHESTER CIRCLE", "city": "BOULDER", "state": "CO", "zip": "80301"}}
--------------------------------------------------------------------------------
     As filed with the Securities and Exchange Commission on January 25, 2000 -
                                                      Registration No. _________

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM S-8

                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                            APPLIED FILMS CORPORATION
             (Exact name of registrant as specified in its charter)

         Colorado                                         84-1311581
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                9586 I-25 Frontage Road, Longmont, Colorado 80504
               (Address of Principal Executive Offices) (Zip Code)

          Applied Films Corporation Outside Director Stock Option Plan
                            (Full Title of the Plan)

    Lawrence D. Firestone, 9586 I-25 Frontage Road, Longmont, Colorado 80504,
                                 (303) 774-3246
           (Name, address, and telephone number of agent for service)

                          Copies of Communications to:
                             William J. Lawrence III
                    Varnum, Riddering, Schmidt & Howlett LLP
                      333 Bridge Street, N.W., P.O. Box 352
                        Grand Rapids, Michigan 49501-0352
                                 (616) 336-6000

                         CALCULATION OF REGISTRATION FEE

=======================================================================================================================
                                                        Proposed                Proposed
                                                         Maximum                 Maximum                 Amount of
  Title of Securities         Amount Being           Offering Price             Aggregate              Registration
   Being Registered            Registered             Per Share(1)          Offering Price(1)             Fee(2)
=======================================================================================================================
Common Stock                  24,000 shares             $14.97                  $359,280                 $95
=======================================================================================================================
(1)      For the purpose of  computing  the  registration  fee only,  the price
         shown is based upon the price of $14.97 per share,  the average of the
         high and low  sales  prices  for the  Common  Stock of  Applied  Films
         Corporation in the NASDAQ  National Market System on January 21, 2000,
         in accordance with Rule 457(h).
(2)      Registration  fee  is  calculated  on the  basis  of  1/37.8787  of 1%
         (.000264) of the proposed maximum aggregate offering price of $359,280.

Pursuant  to  Rule  416(a)  of the  General  Rules  and  Regulations  under  the
Securities Act of 1933, this Registration  Statement shall cover such additional
securities as may be offered or issued to prevent dilution  resulting from stock
splits, stock dividends or similar transactions.
================================================================================
PART I
              INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

     Information  required  by  Part  I to be  contained  in the  Section  10(a)
prospectus is omitted from this  Registration  Statement in accordance with Rule
428 under the Securities Act of 1933 (the "Securities Act") and the Note to Part
I of Form S-8.

                                     PART II
               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference

     The following  documents filed with the Securities and Exchange  Commission
(the "Commission") are incorporated herein by reference:

          (a) The Annual  Report on Form 10-K and 10-K/A of the  Registrant  for
     the year ended July 3, 1999.

          (b) All other reports filed  pursuant to Section 13(a) or 15(d) of the
     Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the
     end of the fiscal year covered by the Annual  Report on Form 10-K  referred
     to in (a) above.

          (c) The description of the Registrant's  Common Stock contained in the
     Registrant's  Registration  Statement on Form 8-A filed pursuant to Section
     12(b) of the Exchange Act,  including  any  amendments or reports filed for
     the purpose of updating such description.

     All  reports  and  other  documents  subsequently  filed by the  Registrant
pursuant to Sections  13(a),  13(c),  14 and 15(d) of the Exchange Act, prior to
the filing of a  post-effective  amendment  which  indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold,  shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents.  Any statement
contained in a document  incorporated  or deemed to be incorporated by reference
herein  shall be  deemed to be  modified  or  superseded  for  purposes  of this
Registration Statement to the extent that a statement contained herein or in any
other  subsequently  filed document which also is  incorporated  or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded  shall not be deemed,  except as so modified
or superseded, to constitute a part of this Registration Statement.

Item 4.  Description of Securities

     The class of securities to be offered is registered under Section 12 of the
Exchange Act.

Item 5.  Interests of Named Experts and Counsel

     Not Applicable.

Item 6.  Indemnification of Directors and Officers

     Section 7-109-102  through  7-109-110 of the Colorado Business  Corporation
Act (the "Act") grant the  Registrant  broad  powers to indemnify  any person in
connection with legal  proceedings  brought against him by reason of his present
or past  status as an officer  or  director  of the  Registrant,  provided  with
respect to conduct in an official

                                       S-2
capacity with the Registrant,  the person acted in good faith and in a manner he
reasonably believed to be in the best interests of the Registrant,  with respect
to all other conduct, the person believed the conduct to be in or not opposed to
the best interests of the Registrant, and with respect to any criminal action or
proceeding,  the  person had no  reasonable  cause to believe  his  conduct  was
unlawful.   Indemnification  is  limited  to  reasonable  expenses  incurred  in
connection with the proceeding. No indemnification may be made (i) in connection
with a proceeding  by or in the right of the  Registrant in which the person was
adjudged  liable  to the  Registrant;  or  (ii) in  connection  with  any  other
proceedings  charging  that the person  derived an  improper  personal  benefit,
whether or not involving action in an official capacity, in which proceeding the
person was judged  liable on the basis  that he  derived  an  improper  personal
benefit,  unless  and only to the  extent  the court in which  such  action  was
brought or another court of competent  jurisdiction  determines upon application
that, despite such adjudication, but in view of all relevant circumstances,  the
person is fairly and reasonably entitled to indemnity for reasonable expenses as
the court  deems  proper.  In  addition,  to the extent  that any such person is
successful  in the  defense  of any such legal  proceeding,  the  Registrant  is
required by the Act to Indemnify him against reasonable expenses.

     The Registrant's  Amended and Restated  Articles of  Incorporation  contain
provisions  which permit the  Registrant to indemnify its officers and directors
to the fullest extent  permitted by the Colorado  Business  Corporation Act. The
Registrant  has  entered  into  indemnification  agreements  with  each  of  its
directors and certain of its officers providing for similar indemnification.  In
addition to the available indemnification, the Registrant's Amended and Restated
Articles of  Incorporation  limit the  personal  liability of the members of its
Board of Directors,  subject to certain  exceptions,  for monetary  damages with
respect to claims by the Registrant or its shareholders.

     The  Registrant's  Amended and Restated  Bylaws provide that the Registrant
may  purchase  and  maintain  insurance  on behalf of its  directors,  officers,
employees, fiduciaries and agents against liability asserted against or incurred
by such persons in any such capacity.

Item 7.  Exemption from Registration Claimed

     Not Applicable.

Item 8.  Exhibits

     Reference is made to the Exhibit Index which appears on page S-6.

Item 9.  Undertakings

     The undersigned registrant hereby undertakes:

          (a) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this Registration Statement:

               (i) To include any prospectus required by Section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
          after the effective  date of the  Registration  Statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate,  represents a  fundamental  change in the  information  set
          forth in the Registration  Statement.  Notwithstanding  the foregoing,
          any increase or decrease in volume of securities offered (if the total
          dollar  value of  securities  offered  would not exceed that which was
          registered)  and  any  deviation  from  the  low  or  high  and of the
          estimated  maximum  offering  range  may be  reflected  in the form of
          prospectus  filed with the  Commission  pursuant to Rule 424(b) if, in
          the aggregate,  the changes in volume and price represent no more than
          20 percent change in the maximum aggregate

                                       S-3
offering  price set forth in the  "Calculation  of  Registration  Fee"
          table in the effective Registration Statement;

               (iii) To include any  material  information  with  respect to the
          plan of  distribution  not  previously  disclosed in the  Registration
          Statement  or  any  material   change  to  such   information  in  the
          Registration Statement;  provided, however, that paragraphs (a)(i) and
          (a)(ii)  do not apply if the  Registration  Statement  is on Form S-3,
          Form S-8, or Form F-3, and the information  required to be included in
          a  post-effective  amendment  by  those  paragraphs  is  contained  in
          periodic  reports  filed by the  Registrant  pursuant to Section 13 or
          Section 15(d) of Securities Exchange Act of 1934 that are incorporated
          by reference in the Registration Statement.

          (b) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment shall be deemed
     to be a new  Registration  Statement  relating  to the  securities  offered
     therein,  and the offering of such  securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (c) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

     The  undersigned   Registrant  hereby  undertakes  that,  for  purposes  of
determining  any liability  under the Securities Act of 1933, each filing of the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
Registration  Statement  shall  be  deemed  to be a new  Registration  Statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors,  officers and controlling  persons of the
Registrant pursuant to the foregoing  provisions,  or otherwise,  the Registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against  public policy as expressed in the Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the Registrant of expenses incurred
or paid by a director,  officer or  controlling  person of the Registrant in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

                                       S-4
SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the  City of  Longmont,  State of  Colorado,  on the 25th day of
January, 2000.

                          APPLIED FILMS CORPORATION

                          By  /s/ Thomas T. Edman
                          Thomas T. Edman, President and Chief Executive Officer

                                POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS,  that each person whose  signature  appears
below  constitutes and appoints  Thomas T. Edman and Lawrence D. Firestone,  and
each of them, his true and lawful attorney-in-fact and agent, with full power of
substitution  and  resubstitution,  for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments)  to this  Registration  Statement  and to file  the  same,  with all
exhibits  thereto,  and  other  documents  in  connection  therewith,  with  the
Securities and Exchange Commission and any other regulatory authority,  granting
unto said attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing  required and necessary to be done in and about the
premises,  as  fully  to all  intents  and  purposes  as he might or could do in
person,  hereby  ratifying and  confirming  all that said  attorney-in-fact  and
agent, or his substitute, may lawfully do or cause to be done by virtue hereof.

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has been  signed  below on  January  25,  2000,  by the
following persons in the capacities indicated.

      Signatures                              Title

  /s/ Thomas T. Edman        President, Chief Executive Officer and Director
    Thomas T. Edman          (principal executive officer)

                             Chief Financial Officer and Treasurer (principal
/s/ Lawrence D. Firestone    financial officer and principal accounting officer)
  Lawrence D. Firestone

   /s/ Richard P. Beck       Director
      Richard P. Beck

   /s/ John S. Chapin        Vice President -- Research, Secretary and Director
     John S. Chapin

  /s/ Vincent Sollito, Jr.   Director
    Vincent Sollito, Jr.

    /s/ Chad D. Quist        Director
      Chad D. Quist

  /s/ Cecil Van Alsburg      Director
    Cecil Van Alsburg
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors
Applied Films Corporation

As  independent  public  accountants,  we hereby  consent  to  incorporation  by
reference  in this  registration  statement  of our report  dated July 27, 1999,
included  in Applied  Films  Corporation's  annual  report on Form 10-K and Form
10-K/A (Registration No. 000-23103),  and to all references to our firm included
in this registration statement.

                              /s/ ARTHUR ANDERSEN LLP

Denver, Colorado
   January 24, 2000

                                       S-5
EXHIBIT INDEX

     The following exhibits are filed as a part of the Registration Statement:

Exhibit
Number      Description of Document

4.1      Applied Films Corporation Outside Director Stock Option Plan

5.1      Opinion of Varnum, Riddering, Schmidt & Howlett LLP with respect to the
         legality of the securities being registered

23.1     Consent of Arthur Andersen LLP - included on page S-6 hereof

23.2     Consent of Varnum, Riddering, Schmidt & Howlett LLP (included in
         opinion filed as Exhibit 5.1)

24.1     Power of Attorney - included on page S-5 hereof

                                       S-6
APPLIED FILMS CORPORATION
                       OUTSIDE DIRECTOR STOCK OPTION PLAN

     1.  Name  and  Purpose.  This  plan  shall  be  called  the  Applied  Films
Corporation  Outside  Director  Stock  Option  Plan  (the  "Plan").  The Plan is
intended to encourage stock ownership by nonemployee  directors of Applied Films
Corporation  (the  "Company"),  to provide  such  directors  with an  additional
incentive to manage the Company  effectively  and to  contribute to its success,
and to provide a form of  compensation  which  will  attract  and retain  highly
qualified individuals as members of the Board of Directors of the Company.

     2.  Effective  Date and Term of the Plan.  The Plan shall become  effective
upon its  approval  by the Board of  Directors  of the Company  (the  "Effective
Date").  Options  may not be  granted  under the Plan  after  the  tenth  (10th)
anniversary  of the Effective  Date (the "Term");  provided,  however,  that all
options outstanding as of that date shall remain or become exercisable  pursuant
to their terms and the terms of the Plan.

     3. Administration. The Plan shall be administered by a committee designated
by the Board of  Directors of the Company (the  "Committee")  consisting  of not
less  than two (2)  directors  who shall be  appointed  from time to time by the
Board, each of whom shall qualify as a Nonemployee  Director, as defined in Rule
16b-3(b)(3) of the Securities Exchange Act of 1934, as amended.

     The  Committee  may,  from  time  to  time,   establish  such  regulations,
provisions  and  procedures,  within the terms of the Plan, as in the opinion of
its members may be advisable in the  administration  of the Plan.  The Committee
shall keep minutes of its meetings. A majority of the Committee shall constitute
a quorum, and the acts of a majority of a quorum at any meeting, or acts reduced
to or approved in writing by a majority of the members of the  Committee,  shall
be the valid acts of the Committee.

     The  interpretation  and construction by the Committee of any provisions of
the  Plan or of any  option  granted  pursuant  to the Plan  shall be final  and
binding  upon  the  Company,  the  Board of  Directors  of the  Company  and any
optionee.  No member of the Board of Directors  of the Company or the  Committee
shall be liable for any action or determination  made in good faith with respect
to the Plan or any option granted pursuant thereto.

     4. Participation.  Subject to the limitations  contained in this Section 4,
directors of the Company,  who are neither  contractual nor common law employees
of the Company or any of its subsidiaries,  shall be granted options to purchase
shares of the  Company's  common  stock in  accordance  with the  provisions  of
Section 6 of the Plan and consistent  with the terms and conditions of the Plan.
An optionee may hold more than one option,  but only on the terms and subject to
the restrictions hereafter set forth. Subject to adjustments consistent with the
provisions of

                                   EXHIBIT 4.1
Subsection  6(h), no one nonemployee  director may be granted  options  covering
more  than a total of  fifteen  percent  (15%) of the  common  stock  originally
reserved  for  issuance  under the Plan,  as  defined  in  Section  5, plus such
increases  therein  as may  from  time  to  time be  approved  by the  Company's
shareholders.

     5. Stock  Available for Options.  Subject to the adjustments as provided in
Subsection  6(h),  the aggregate  number of shares  reserved for purposes of the
Plan shall be 24,000  authorized and unissued shares or issued shares reacquired
by the Company (the  "Shares").  Determinations  as to the number of Shares that
remain  available for issuance  under the Plan shall be made in accordance  with
such rules and  procedures as the Committee  shall  determine from time to time,
which shall be consistent with the  requirements of Rule 16b-3 of the Securities
Exchange  Act of 1934,  as amended,  and such  interpretations  thereof.  If any
outstanding option under the Plan expires or is terminated for any reason before
the end of the Term of the Plan, the shares allocable to the unexercised portion
of such option shall become  available  for the grant of other options under the
Plan.  No shares  delivered  to the  Company  in full or  partial  payment  upon
exercise of an option  pursuant to Subsection 6(d) or in full or partial payment
of any  withholding  tax  liability  permitted  under  Section  9  shall  become
available for the grant of other options under the Plan.

     6. Terms and  Conditions of Option  Agreement.  Options  granted under this
Plan shall be evidenced by agreements  in such form as the Committee  shall from
time to time approve,  which  agreements shall comply with and be subject to the
following conditions:

          (a)  Optionee's  Agreement.  Each optionee  shall agree to continue to
     serve as a director of the  Company for the lesser of at least  twelve (12)
     months  from the date of the grant of the  option or for the  remainder  of
     such optionee's term as a director of the Company. Such agreement shall not
     impose upon the Company,  its Board of Directors,  or its  shareholders any
     obligation to retain the optionee as a director for any period.

          (b) Number of Shares and Term of Options.  Each option shall state the
     number of shares of the Common  Stock of the Company to which it  pertains.
     The term of each option  shall be for a period of not greater than ten (10)
     years from the date of grant of the option.

          (c) Option Price.  The exercise price of each option shall be equal to
     one hundred percent (100%) of the Fair Market Value of the shares of Common
     Stock on the date of the grant of the  option.  If the shares are traded in
     the  over-the-counter  market, the Fair Market Value per share shall be the
     closing  price  on the  national  market  list as  quoted  in the  National
     Association of Securities Dealers Automated  Quotation System ("NASDAQ") on
     the day the  option is  granted  or if no sale of shares  is  reflected  in
     NASDAQ on that day, on the next  preceding day on which there was a sale of
     shares  reflected  in  NASDAQ.   If  the  shares  are  not  traded  in  the
     over-the-counter  market but are listed upon an established  stock exchange
     or  exchanges,  such Fair  Market  Value  shall be deemed to be the closing
     price of the  shares on such stock  exchange  or  exchanges  on the day the
     option is granted or if no sale of the

                                        2
shares shall have been made on any stock  exchange on that day, on the next
     preceding day on which there was a sale of the shares.

          (d)  Medium of  Payment.  The  option  price  shall be  payable to the
     Company  either  (i) in United  States  dollars  in cash or by check,  bank
     draft,  or money order  payable to the order of the Company or (ii) through
     the  delivery of shares of the  Company's  Common  Stock with a Fair Market
     Value on the date of the exercise equal to the option price,  provided such
     shares  are  utilized  as  payment to acquire at least 100 shares of Common
     Stock,  or (iii) by a combination of (i) and (ii) above.  Fair Market Value
     will be determined in the manner  specified in Subsection 6(c) except as to
     the date of determination.

          (e)  Exercise of Options.  Except as  provided in  Subsection  6(h) no
     option shall be exercisable, either in whole or in part, prior to the first
     anniversary  of the date of grant of the option.  Subject to the foregoing,
     the Committee  shall have the  authority to  determine,  at the time of the
     grant of each Option, the times at which an Option may be exercised and any
     conditions  precedent  to the  exercise  of an Option.  An option  shall be
     exercisable  upon  written  notice to the Chief  Financial  Officer  of the
     Company,  as to  any  or all  shares  covered  by  the  option,  until  its
     termination or expiration in accordance with its terms or the provisions of
     the Plan. Notwithstanding the foregoing, an option shall not at any time be
     exercisable  with  respect  to less than 100 shares  unless  the  remaining
     shares covered by an option are less than 100 shares. The purchase price of
     the  shares  purchased  pursuant  to an  option  shall be paid in full upon
     delivery to the optionee of  certificates  for such shares.  Exercise by an
     optionee's heir or personal representative shall be accompanied by evidence
     of his or her authority to act, in a form  reasonably  satisfactory  to the
     Company.

          (f)  Options  not  Transferable.  Options  may not be  sold,  pledged,
     assigned,  or transferred in any manner  otherwise than by will or the laws
     of descent or  distribution  to the extent  provided  in  Subsection  6(g).
     During the lifetime of an optionee,  the options shall be exercisable  only
     by the optionee.  Following the death of an optionee,  the options shall be
     exercisable only to the extent provided in Subsection 6(g).

          (g) Termination of Service as Director.

               (i)  Termination  of Service for any Reason Other than Death.  In
          the event an  optionee  shall cease to serve the Company as a director
          for any reason other than such optionee's  death,  each option held by
          such optionee shall remain  exercisable,  subject to prior  expiration
          according to its terms and other limitations  imposed by the Plan, for
          a period of one (1) year following the optionee's cessation of service
          as a  director  of  the  Company.  If the  optionee  dies  after  such
          cessation of service,  the optionee's  options shall be exercisable in
          accordance with Subsection 6(g)(ii) hereof.

               (ii)  Termination of Service for Death.  If an optionee ceases to
          be a director by reason of death,  each  option held by such  optionee
          shall, to the extent

                                        3
rights to purchase  shares  under the option have been  accrued at the
          time of death and shall not have been fully exercised, be exercisable,
          in whole or in part, by the personal  representative of the optionee's
          estate or by any  person  or  persons  who have  acquired  the  option
          directly  from the  optionee  by  bequest  or  inheritance  during the
          shorter of the following periods:  (i) the term of the option, or (ii)
          a period  of one (1)  year  from the  death  of such  optionee.  If an
          optionee dies during the extended exercise period following  cessation
          of service  specified in Subsection  6(g)(i) above, such option may be
          exercised  any time within the longer of such  extended  period or one
          (1) year after death,  subject to the prior  expiration of the term of
          the option.

          (h)  Adjustment  in Shares  Covered  by  Option.  The number of shares
     covered  by each  outstanding  option,  and the  purchase  price  per share
     thereof, shall be proportionately  adjusted for any increase or decrease in
     the number of issued and  outstanding  shares  resulting from a split in or
     combination  of shares or the payment of a stock  dividend on the shares or
     any other  increase  or  decrease  in the  number of such  shares  effected
     without receipt of consideration by the Company.

     If the  Company  shall  be the  surviving  corporation  in  any  merger  or
consolidation or if the Company is merged into a wholly owned subsidiary  solely
for purposes of changing the Company's state of incorporation,  each outstanding
option  shall  pertain to and apply to the  securities  to which a holder of the
number of shares subject to the option would have been  entitled.  A dissolution
or liquidation of the Company or a merger or  consolidation in which the Company
is not the surviving  corporation,  except as above  provided,  shall cause each
outstanding  option to terminate,  provided,  that each optionee  shall, in that
event, have the right  immediately prior to such dissolution or liquidation,  or
merger or consolidation  in which the Company is not the surviving  corporation,
to exercise his or her option in whole or in part.

     In the event of a change in the shares as presently  constituted,  which is
limited to a change of all of its authorized shares with par value into the same
number of shares  with a different  par value or without  par value,  the shares
resulting  from any such  change  shall be deemed to be the  shares  within  the
meaning of the Plan.

     To the extent that the foregoing  adjustments relate to stock or securities
of  the  Company,  such  adjustments  shall  be  made  by the  Committee,  whose
determination in that respect shall be final,  binding and conclusive.  Any such
adjustment may provide for the  elimination of any fractional  share which might
otherwise become subject to an option.

     Except as  hereinbefore  expressly  provided in this  Subsection  6(h), the
optionee shall have no rights by reason of any split or combination of shares of
stock of any class or the payment of any stock dividend or any other increase or
decrease  in the  number  of  shares  of stock of any  class or by reason of any
dissolution, liquidation, merger, or consolidation or spinoff of assets or stock
of another corporation, and any issue by the Company of shares of

                                        4
stock of any class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of stock subject to the option.

     The grant of an option pursuant to the Plan shall not affect in any way the
right  or  power  of  the  Company  to  make   adjustments,   reclassifications,
reorganizations, or changes of its capital or business structure, or to merge or
to consolidate or to dissolve, liquidate or sell, or transfer all or any part of
its business or assets.

          (i) Rights of a  Shareholder.  An  optionee  shall have no rights as a
     shareholder  with respect to any shares  covered by his or her option until
     the date on which the optionee becomes the holder of record of such shares.
     No adjustment shall be made for dividends,  distributions,  or other rights
     for  which  the  record  date is prior to the date on which he or she shall
     have become the holder of record thereof,  except as provided in Subsection
     6(h).

          (j)  Postponement  of  Delivery  of Shares  and  Representations.  The
     Company,  in its  discretion,  may postpone the issuance and/or delivery of
     shares upon any exercise of an option until  completion of the registration
     or other  qualification  of such shares under any state and/or federal law,
     rule or regulation as the Company may consider appropriate, and may require
     any person exercising an option to make such  representations,  including a
     representation  that it is the  optionee's  intention to acquire shares for
     investment and not with a view to  distribution  thereof,  and furnish such
     information as it may consider  appropriate in connection with the issuance
     or delivery of the shares in compliance with applicable  laws,  rules,  and
     regulations.  In such event no shares shall be issued to such holder unless
     and  until  the  Company  is  satisfied  with  the  accuracy  of  any  such
     representations.

          (k) Other Provisions.  The option agreements authorized under the Plan
     shall  contain  such  other  provisions,   including,  without  limitation,
     restrictions  upon the exercise of the option,  as the Committee shall deem
     advisable.

     7. Adjustments in Shares  Available for Options.  The adjustments in number
and kind of shares and the substitution of shares, affecting outstanding options
in accordance with  Subsection  6(h) hereof,  shall also apply to the number and
kind of shares  reserved for issuance  pursuant to the Plan, but not yet covered
by options.

     8. Amendment of the Plan. The Committee, insofar as permitted by law, shall
have the right  from time to time,  with  respect  to any shares at the time not
subject to options,  to suspend or discontinue the Plan or revise or amend it in
any  respect  whatsoever,  and except  that,  without  approval  of the Board of
Directors of the Company, no such revision or amendment shall:

          (a) increase the maximum  number of shares which may be subject to the
     Plan,

          (b) materially  increase the benefits accruing to option holders under
     the Plan,

                                        5
(c) decrease the exercise price of options granted under the Plan,

          (d) remove the administration of the Plan from the Committee, or

          (e) permit the  granting  of options  under the Plan after the Term of
     the Plan.

     9.  Withholding  of Taxes.  The Company shall have the right to deduct from
any payment to be made pursuant to this Plan, or to otherwise require,  prior to
the issuance or delivery of any shares of Common Stock,  payment by the optionee
of any federal,  state,  or local taxes  required by law to be withheld.  Unless
otherwise  prohibited  by the  Committee,  an  optionee  may  satisfy  any  such
withholding  tax obligation by any of the following means or by a combination of
such means:

          (a) tendering a cash payment;

          (b)  authorizing  the  Company to withhold  from the shares  otherwise
     issuable to the  optionee a number of shares  having a Fair Market Value as
     of the "Tax  Date,"  less than or equal to the  amount of  withholding  tax
     obligation; or

          (c)  delivering  to  the  Company  unencumbered  shares  owned  by the
     optionee having a Fair Market Value, as of the Tax Date, less than or equal
     to the amount of the withholding tax obligation.

The "Tax  Date"  shall be the date  that the  amount  of tax to be  withheld  is
determined.  Fair Market Value shall be  determined  in the manner  specified in
Subsection 6(c), except as to the date of determination.  An optionee's election
to pay the  withholding  tax  obligation  by either of (b) or (c) above shall be
irrevocable,  may be disapproved  by the Committee,  and must be made either six
months  prior  to the Tax Date or  during  the  period  beginning  on the  third
business day following the date of release of the Company's  quarterly or annual
summary  statement of sales and earnings and ending on the twelfth  business day
following such date.

     10. Right of Board of Directors to Terminate Director's Service. Nothing in
this  Plan or in the  grant of any  option  hereunder  shall in any way limit or
effect the right of the Board of Directors of the Company to remove any director
or otherwise  terminate  his or her service as a director,  pursuant to law, the
Articles of Incorporation, or Bylaws of the Company.

     11.  Application  of Funds.  The proceeds  received by the Company from the
sale of stock pursuant to options will be used for general corporate purposes.

     12. No  Obligation  to Exercise  Option.  The  granting of an option  shall
impose no obligation upon the optionee to exercise such option.

                                        6
13. Construction.  This Plan shall be construed under the laws of the State
of Colorado, United States of America.

                                                 APPROVED:

                                                 /s/ Thomas T. Edman
                                                 Thomas T. Edman, President

                                  CERTIFICATION

     This Plan was duly  adopted by the Board of  Directors  of the  Company the
26th day of October, 1999.

                                              /s/ John S. Chapin
                                              John S. Chapin, Secretary

::ODMA\PCDOCS\GRR\380623\3
                                        7
January 25, 2000

Applied Films Corporation
9586 I-25 Frontage Road
Longmont, Colorado 80504

         Re:      Registration Statement on Form S-8 Relating to the Applied
                  Films Corporation Outside Director Stock Option Plan (the
                  "Plan")

Gentlemen:

     With respect to the Registration  Statement on Form S-8 (the  "Registration
Statement)  filed by Applied  Films  Corporation,  a Colorado  corporation  (the
"Company")  with the  Securities  and  Exchange  Commission,  for the purpose of
registering  under the Securities Act of 1933, as amended,  24,000 shares of the
Company's common stock, no par value, for issuance pursuant to the Plan, we have
examined  such  documents  and  questions  of  law  we  consider   necessary  or
appropriate  for the  purpose  of  giving  this  opinion.  On the  basis of such
evaluation,  we advise you that in our opinion the 24,000 shares  covered by the
Registration  Statement,  upon the  exercise  of stock  options,  at the  prices
described in the Registration Statement but not less than the par value thereof,
and upon  delivery of such shares and payment  therefor in  accordance  with the
terms  stated  in the  Plan  and the  Registration  Statement,  will be duly and
legally  authorized,  issued  and  outstanding,  and  will  be  fully  paid  and
nonassessable.

     We hereby  consent  to the  filing of this  opinion  as an  exhibit  to the
Registration  Statement. In giving this consent, we do not thereby admit that we
are within the category of persons whose consent is required  under Section 7 of
the  Securities Act of 1933, as amended,  or under the rules and  regulations of
the Securities and Exchange Commission relating thereto.

                                   Sincerely,

                    VARNUM, RIDDERING, SCHMIDT & HOWLETT LLP

                           /s/ William J. Lawrence III

                        William J. Lawrence III, Partner

                                   EXHIBIT 5.1
::ODMA\PCDOCS\GRR\383291\2