We report results from intensive monitoring of two fields on either side of M31,emphasizing microlensing involving stars and masses in M31. These results stem from the three-year VATT/Columbia survey of variability on 3d to 2m timescales. Observations were conducted intensively from 1997-1999, with baselines 1995-now,at the Vatican Advanced Technology Telescope, MDM 1.3-meter, and Isaac Newton telescopes, totaling about 200 epochs. The two fields cover 560 square arcmin total, along the minor axis on either side of M31. Candidate microlensing events are subject to tests to distinguish microlenses from variable stars. Fourprobable microlensing events total, compared to carefully computed event rate and efficiency models, indicate a marginally significant microlensing activity above expectations for the stellar lenses alone in M31 (and the Galaxy) acting as lenses. Maximum likelihood analyses of the event distribution in timescale and across the face of M31 indicates a microlensing dark matter halo fraction consistent with that seen in our Galaxy towards the LMC (Alcock et al. 2000). For a nearly singular isothermal sphere model, we find a microlensing halo mass fraction f=0.29 +0.30/-0.13 of total dark matter, and a poorly constrained lensing component mass 0.02 to 1.5 solar mass, 1 sigma limits). This study is the prototype for a larger one approaching completion; between them there is significant evidence for asymmetry in the distribution of microlensing events across the face of M31, and a large population of halo microlensing objects. (Abridged)

25 pages, LaTex; 11 figures. Revised, refereed manuscript resubmitted to The Astrophysical Journal. Corrected Figure 8 and other minor points