SWF T1201 Thread Breaks but Thread is NOT broken HELP!

Check your thread-break sensor. On my machine (Brother) this is a small spool-like thing. The thread has to wind around it a few times on it's way to the needle. As long as the spool is being turned by the thread, the machine thinks the thread is unbroken. If you have your machine threaded correctly, try winding the thread around this sensor a few more times. If it still thinks your thread is broken, you may have to re-set the sensitivity of the sensor, or have it fixed.

On the top of the front of the machine, directly below the top pre-tensioners and above the main tensioners is a small round disc. That is the thread movement sensor - the thread needs to be wrapped around it. As the thread is pulled through, the disc turns and that tells the machine it is moving. If the disc does not turn, the machine will say there is a thread break.

There is also a setting in the control panel to tell the machine how many stitches to wait before it stops for a thread break. If you increase the number, it will eliminate a lot of false thread break stops - I think I have mine set to 8 or 9 stitches instead of the default which I think was 3 or 4.

There are only 4 possible problems if you are getting a thread break indication they are.
1) Upper needle thread is broken.
2) Upper thread not threaded properly around the thread break sensor.
3) Wiring plug for sensor came loose.
4) Thread sensor defective.

If, as you indicate the thread is not broken you need to start at the easiest solution. Properly thread your machine. Be sure to follow the proper needle's thread path(I have seen machines properly threaded but off by one needle.). If at this point the thread is properly threaded then you need to check the plug that connects with the thread sensor, I believe that the actual sensor moves with the needle bar head on yours as our Tajimas do. this was there is only one sensor that checks the actual needle bar in use. This sensor has a plug that can come partially disconnected, if so plug it back in. If this doesn't clear the problem then I would recommend you contact SWF for assistance or your local tech. Hope this helps. ;)

I assume you've carefully checked the thread path for unwanted lint.