This paper proposes a method of fault analysis for induction motors. The method is based on frequency domain and time-frequency domain analysis. Extended Discrete-Furrier Transform or EDFT is a proposed technique of signal processing. The principle is that any fault either in the stator or the rotor may distort the sinusoidal response of the motor RPM and the main frequency. Because the EDFT relates to both amplitude and frequency of number of harmonics in a signal, hence the EDFT is expected to show some harmonics around the mains frequency and other frequencies which have ability to differentiate the faults. The EDFT is applied to analyze motor faults on both frequency and time-frequency domain. The method is tested on 3 different motor conditions: healthy, stator fault, and rotor fault motor at full load condition. The experiments show that it can differentiate conditions clearly by observing the change in harmonic amplitudes for frequency domain and the change in color indexes for time-frequency domain. The method can also indicate the level of the fault severity by observing the percent change in the harmonic amplitudes and color index numbers.