UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]               QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2001

[ ]               TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF
                  THE SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from ____________ to ______________

                           Commission File No. 0-28067

                               FIRST RESERVE, INC.
                               -------------------
             (Exact name of registrant as specified in its charter)

               Florida                                           86-0740730
   -------------------------------                          -------------------
   (State or other jurisdiction of                           (I.R.S. Employer
   incorporation or organization)                           Identification No.)

   1360 South Dixie Highway, Coral Gables, FL                     33146
-------------------------------------------------------------------------------
   (Address of principal executive offices)                     (Zip Code)

                                 (305) 667-8871
-------------------------------------------------------------------------------
                 Issuer's Telephone Number, Including Area Code:

-------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          if changed since last report)

         Indicate by a check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No

         As of March 31, 2001, 6,690,050 shares of the Registrant's Common
Stock, no par value per share, were outstanding.

<PAGE>


                      FIRST RESERVE, INC. AND SUBSIDIARIES

                              INDEX TO FORM 10-QSB


<TABLE>
<CAPTION>
                                                                                                                    Page
                                                                                                                    ----
<S>               <C>                                                                                                <C>
                                          PART I - FINANCIAL INFORMATION

Item 1.           Financial Statements

                  Condensed Consolidated Balance Sheets
                  March 31, 2001 and December 31, 2000.............................................................  1

                  Condensed Consolidated Statements of Income and Accumulated Deficit
                  Three Months Ended March 31, 2001 and March 31, 2000.............................................  3

                  Condensed Consolidated Statements of Cash Flows
                  Three Months Ended March 31, 2001 and March 31, 2000.............................................  4

                  Notes to Condensed Consolidated Financial Statements.............................................  6

Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.............................................................. 12


                                            PART II - OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K ................................................................ 14

Signatures......................................................................................................... 15
</TABLE>

                                                        ii
<PAGE>

                      FIRST RESERVE, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET

                                     ASSETS

                                          (Unaudited)
                                           March 31,     December 31,
CURRENT ASSETS                                2001           2000
                                          -----------    -----------
    Cash                                  $ 1,259,920    $   881,258
    Interest-bearing deposit with bank        225,000        225,000
    Receivables                               883,765        800,315
    Mortgage loans held for sale            2,589,200      2,059,016
    Prepaid expenses and other                171,853        264,013
                                          -----------    -----------

           Total current assets             5,129,738      4,229,602
                                          -----------    -----------



PROPERTY AND EQUIPMENT
    Furniture and equipment                 1,225,411      1,233,021
    Office equipment                          847,281        928,329
    Transportation equipment                   20,000         20,000
    Leasehold improvements                    690,244        690,244
    Equipment held under capital leases        35,730         35,730
                                          -----------    -----------
                                            2,818,666      2,907,324

    Less accumulated depreciation          (1,007,913)    (1,085,269)
                                          -----------    -----------

           Net property and equipment       1,810,753      1,822,055
                                          -----------    -----------

OTHER ASSETS
    Goodwill, net                           1,271,225      1,286,660
    Deposits and other                        181,748        182,513
                                          -----------    -----------

           Total other assets               1,452,973      1,469,173
                                          -----------    -----------

           Total assets                   $ 8,393,464    $ 7,520,830
                                          ===========    ===========

The accompanying notes to the condensed consolidated financial statements are an
integral part of these statements.

                                        1

<PAGE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                  (Unaudited)
                                                                                   March 31,     December 31,
                                                                                      2001          2000
                                                                                  -----------    -----------
<S>                                                                               <C>            <C>
CURRENT LIABILITIES
    Accounts payable and accrued expenses                                         $   631,851    $   546,576
    Bank overdraft                                                                         --        108,360
    Deferred mortgage fee income                                                       63,288         58,625
    Reserves on deposit                                                                 8,330         63,820
    Warehouse line of credit - bank                                                 2,570,867      1,788,324
    Income tax payable                                                                 17,223             --
    Current portion of obligations under
        capital leases                                                                  7,012          7,012
    Current maturities of long-term debt, net
        of unamortized discount                                                       709,894        204,985
                                                                                  -----------    -----------

           Total current liabilities                                                4,008,465      2,777,702
                                                                                  -----------    -----------

LONG-TERM LIABILITIES
    Obligations under capital leases                                                   15,624         17,287
    Note payable, net of unamortized discount                                         231,251        725,843
                                                                                  -----------    -----------

           Total long-term liabilities                                                246,875        743,130
                                                                                  -----------    -----------

           Total liabilities                                                        4,255,340      3,520,832
                                                                                  -----------    -----------

STOCKHOLDERS' EQUITY
    Common stock, no par value, 100,000,000 authorized shares, 6,915,050 shares
        issued at March 31, 2001 and December 31, 2000, and 6,690,050 and
        6,715,050 outstanding at March 31, 2001 and December 31, 2000,
        respectively                                                                6,139,307      6,139,307
    Accumulated deficit                                                            (1,697,433)    (1,869,309)
    Less treasury stock, 225,000 and 200,000 common stock, no par value at cost
        at March 31, 2001 and December 31, 2000, respectively                        (303,750)      (270,000)
                                                                                  -----------    -----------
           Total stockholders' equity                                               4,138,124      3,999,998
                                                                                  -----------    -----------

           Total liabilities and stockholders' equity                             $ 8,393,464    $ 7,520,830
                                                                                  ===========    ===========
</TABLE>
                                       2

<PAGE>

                      FIRST RESERVE, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                             AND ACCUMULATED DEFICIT

<TABLE>
<CAPTION>
                                                         (Unaudited)    (Unaudited)    (Unaudited)
                                                         Three-month    Three-month    Three-month
                                                         period ended   period ended   period ended
                                                           March 31,      March 31,      March 31,
                                                             2001           2000           1999
                                                         -----------    -----------    -----------
<S>                                                      <C>            <C>            <C>
REVENUES
    Real estate management and brokerage                 $ 8,775,891    $ 5,463,030    $ 4,746,755
    Mortgage                                                 451,028        244,056        275,574
    Title fees                                               281,545        153,186             --
    Insurance                                                  3,956             --             --
                                                         -----------    -----------    -----------

        Total revenues                                     9,512,420      5,860,272      5,022,329
                                                         -----------    -----------    -----------

COSTS AND EXPENSES
    Commissions, fees and other incentives:
        Real estate                                        6,216,318      3,673,639      3,251,357
        Mortgage                                             146,100         69,937        101,691
        Title                                                 83,272         40,864             --
        Insurance                                                 --             --             --
    General and administrative expenses                    2,773,330      2,151,468      1,701,566
    Depreciation and amortization                             95,717         74,136         44,603
    Legal and other settlements                                   --             --          4,000
                                                         -----------    -----------    -----------

           Total costs and expenses                        9,314,737      6,010,044      5,103,217
                                                         -----------    -----------    -----------

           Income (loss) from operations before income
               taxes and other income and expenses           197,683       (149,772)       (80,888)
                                                         -----------    -----------    -----------

OTHER INCOME AND (EXPENSES)
    Interest income                                           37,707          6,369          7,094
    Interest expense                                         (36,525)       (32,217)       (18,864)
    Other income                                              15,700         16,817             --
    Other expenses                                            (4,715)            --           (708)
                                                         -----------    -----------    -----------

           Total other income and (expenses)                  12,167         (9,031)       (12,478)
                                                         -----------    -----------    -----------

           Income (loss) before income taxes                 209,850       (158,803)       (93,366)

PROVISION FOR INCOME TAX                                      37,974             --             --
                                                         -----------    -----------    -----------

           Net income (loss)                                 171,876       (158,803)       (93,366)

ACCUMULATED DEFICIT, beginning of period                  (1,869,309)    (3,246,487)    (3,801,966)
                                                         -----------    -----------    -----------

ACCUMULATED DEFICIT, end of period                       $(1,697,433)   $(3,405,290)   $(3,895,332)
                                                         ===========    ===========    ===========

BASIC EARNINGS (LOSS) PER COMMON SHARE                   $      0.03    $      (.02)   $      (.01)
                                                         ===========    ===========    ===========

WEIGHTED AVERAGE COMMON SHARES                             6,694,772      6,767,050      6,567,050
                                                         ===========    ===========    ===========

DILUTED EARNINGS (LOSS) PER COMMON SHARES                $      0.03    $      (.02)   $      (.01)
                                                         ===========    ===========    ===========

WEIGHTED AVERAGE DILUTED COMMON SHARES                     6,806,772      6,767,050      6,651,629
                                                         ===========    ===========    ===========
</TABLE>

The accompanying notes to the condensed consolidated financial statements are an
integral part of these statements.

                                       3

<PAGE>

                      FIRST RESERVE, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
                                                   (Unaudited)   (Unaudited)    (Unaudited)
                                                   Three-month   Three-month    Three-month
                                                   period ended  period ended   period ended
                                                     March 31,      March 31,     March 31,
                                                       2001           2000          1999
                                                   -----------    -----------    -----------
<S>                                                <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Cash received from customers                   $ 9,393,843    $ 5,875,782    $ 4,989,309
    Interest received                                   37,707          6,369          7,094
    Interest paid                                      (26,208)       (51,074)           (47)
    Cash paid to suppliers and employees            (9,089,806)    (5,923,014)    (5,050,800)
    (Payments to borrowers) receipts from
        lenders, net                                  (638,544)       575,220             --
                                                   -----------    -----------    -----------

           Net cash (used in)  provided by
               operating activities                   (323,008)       483,283        (54,444)
                                                   -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Advances to employees                                8,500         (4,100)            --
    Net decrease (increase) in deposits                 11,489         (2,915)        (4,400)
    Purchases of property and equipment                (65,449)      (247,727)      (331,298)
    Payment for purchase of acquired companies;
        net of cash received                                --             --          5,853
                                                   -----------    -----------    -----------

           Net cash used in investing activities       (45,460)      (254,742)      (329,845)
                                                   -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net proceeds (pay downs) from warehouse
        line of credit                                 782,543       (571,315)            --
    Payment on loan payable                                 --           (949)            --
    Payment of capital lease obligation                 (1,663)            --             --
    Acquisition of treasury stock                      (33,750)            --             --
                                                   -----------    -----------    -----------

           Net cash provided by (used in)
                financing activities                   747,130       (572,264)            --
                                                   -----------    -----------    -----------

           Net increase (decrease) in cash             378,662       (343,723)      (384,289)

CASH, beginning of period                              881,258        727,130      1,055,160
                                                   -----------    -----------    -----------

CASH, end of period                                $ 1,259,920    $   383,407    $   670,871
                                                   ===========    ===========    ===========
</TABLE>

See the accompanying notes to the condensed consolidated financial statements
which are an integral part of these statements.

                                       4

<PAGE>



                      FIRST RESERVE, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

<TABLE>
<CAPTION>
                                                     (Unaudited)   (Unaudited)   (Unaudited)
                                                     Three-month   Three-month   Three-month
                                                     period ended  period ended  period ended
                                                       March 31,    March 31,     March 31,
                                                         2001         2000         1999
                                                       ---------    ---------    ---------
<S>                                                    <C>          <C>          <C>
RECONCILIATION OF NET INCOME (LOSS) TO
   NET CASH PROVIDED BY (USED IN)
   OPERATING ACTIVITIES:
        Net income (loss)                              $ 171,876    $(158,803)   $ (93,366)
        Adjustments to reconcile net income (loss)
            to net cash provided by (used in)
            operating activities:
               Depreciation                               72,036       55,351       31,693
               Amortization                               35,232       15,435       11,706
               Loss on abandonment of property and
                   equipment                               4,715           --           --
               (Increase) decrease in accounts
                   receivable                            (83,450)       3,744      (33,020)
               (Increase) decrease in mortgage loans
                   held for sale                        (530,184)     575,220           --
               Decrease (increase) in prepaid
                   expenses and other assets              53,139      (84,882)      21,759
               Decrease in reserves on deposit           (55,490)          --           --
               Increase in accounts and notes
                   (operating)                                        payable          and
                   accrued  expenses                     112,815       82,269        6,784
               Decrease in bank overdraft               (108,360)          --           --
               Increase (decrease) in deferred
                   mortgage fee income                     4,663      (10,794)          --
               Increase in escrow deposits                    --        5,743           --
                                                       ---------    ---------    ---------

                      Net cash (used in) provided by
                         operating activities          $(323,008)   $ 483,283    $ (54,444)
                                                       =========    =========    =========
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
    On March 31, 1999, the Company purchased all the stock of Columbia Title of
    Florida, Inc. ("Columbia") for $100. As a result of this merger, accounted
    for as purchase, assets of $104,267, goodwill of $66,090, and liabilities of
    $170,257, were recorded.

See the accompanying notes to the condensed consolidated financial statements
which are an integral part of these statements.

                                       5

<PAGE>

                      FIRST RESERVE, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE  1 -       SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
                In the opinion of management, the accompanying unaudited
                condensed consolidated interim financial statements reflect all
                adjustments (consisting of only normal and recurring
                adjustments) necessary to present fairly the financial position
                of First Reserve, Inc. and Subsidiaries (the "Company"), as of
                March 31, 2000, and the results of their operations and cash
                flows for the periods then ended. The results of operations for
                such interim periods are not necessarily indicative of the
                results for a full year. The accompanying unaudited condensed
                consolidated interim financial statements have been prepared in
                accordance with generally accepted accounting principles for
                interim financial reporting and with instructions to Form 10-QSB
                and, accordingly, do not include all disclosures required by
                generally accepted accounting principles. The condensed
                consolidated financial statements should be read in conjunction
                with the audited consolidated financial statements and the notes
                to the audited consolidated financial statements included in the
                Company's Form 10-KSB annual report for 2000 filed with the
                Securities and Exchange Commission.

                The accounting policies followed for interim financial reporting
                are the same as those disclosed in Note 1 of the notes to the
                consolidated financial statements included in the Company's Form
                10-KSB annual report for the year ended December 31, 2000.

NOTE  2 -       ESTIMATES
                The preparation of financial statements in conformity with
                generally accepted accounting principles requires management to
                make estimates and assumptions that affect the amounts reported
                in the financial statements and accompanying notes. Actual
                results could differ from those estimates.

NOTE  3 -       BUSINESS COMBINATIONS
                On September 1, 2000, EWM acquired substantially all the assets
                of Ross & Associates, Inc. ("Ross") in a business combination
                accounted for as a purchase. Ross was primarily engaged in the
                same activity as EWM. Under the terms of the agreement, Ross'
                sole shareholder received 138,000 shares of common stock of the
                Company on the date of the acquisition. An additional 112,000
                "contingent" shares of common stock of the Company will be
                issued pending future gross commission income to be generated by
                the former shareholder of Ross over the next 12 months. Due to
                the contingent nature of these shares, the Company will record
                them as additional purchase price upon issuance of the shares.
                Based on recent trading of the Company's stock, the fair value
                of the Company's stock price on the acquisition date was $1.35
                per share. The total cost of the acquisition, excluding the
                contingent shares, was $186,300.

                On March 31, 1999, the Company acquired all the stock of
                Columbia Title of Florida, Inc. ("Columbia"), in a business
                combination accounted for as purchase. Columbia is engaged in
                the business of closing real estate and mortgage loan
                transactions, primarily in the South Florida area. Columbia has
                two branches, Miami and Key Largo, Florida. Under the terms of
                the agreement, the shareholder of Columbia

                                       6

<PAGE>


                      FIRST RESERVE, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE  3 -       BUSINESS COMBINATIONS (CONTINUED)
                (seller) received $100 for the stock of Columbia. The agreement
                also provided for additional consideration if the assets of the
                Key Largo branch were sold within 90 days of the acquisition
                date. If this condition was met, the seller would receive
                eighty- five percent (85%) of the net proceeds of the sale of
                the assets of the Key Largo branch. If the sale did not
                effectuate within the 90 days, all the assets of the Key Largo
                branch would be transferred back to the seller. The sale of the
                Key Largo branch was made within the 90-day period. As a result,
                additional consideration of $191,250 for the acquisition of the
                stock was recorded after March 31, 1999. The total cost of the
                acquisition was approximately $191,350. Goodwill of
                approximately $257,340 resulting from this transaction is being
                amortized on the straight-line method over 20 years.

                The assets and liabilities of Columbia, and the assets of Ross
                and Daniels (the "acquired companies"), are reflected in the
                accompanying consolidated financial statements. The results of
                operations of the acquired companies are included in the
                consolidated results from the dates they were acquired: March
                31, 1999 for Columbia, and September 1, 2000 for Ross and
                Daniels. The following proforma consolidated statement of income
                gives effect to the acquisitions of all the outstanding shares
                of Columbia as if it had occurred as of January 1, 1999, and
                Daniels as if it had occurred on January 1, 2000, after giving
                effect to certain adjustments, including increased amortization
                of goodwill generated from the acquisitions. The proforma
                adjustments are based upon available information and certain
                assumptions that the Company believes are reasonable. No
                financial information is available for Ross.

                This unaudited proforma condensed consolidated information does
                not purport to represent what the actual results of operations
                would have been assuming the acquisitions had taken place on the
                dates assumed above, nor do they purport to predict the results
                of operations in future periods:

<TABLE>
<CAPTION>
                                                          Three-month   Three-month
                                                          period ended  period ended
                                                           March 31,     March 31,
                                                              2000         1999
                                                           ----------    ----------
                        <S>                                <C>           <C>
                        Total revenue                      $9,778,138    $5,165,386
                                                           ==========    ==========

                        Net loss                           $  (81,365)   $ (113,317)
                                                           ==========    ==========
                        Earnings per share:
                            Basic                          $     (.01)   $     (.02)
                                                           ==========    ==========
                            Weighted average shares         6,767,050     6,567,050
                                                           ==========    ==========
                            Diluted                        $     (.01)   $     (.02)
                                                           ==========    ==========
                            Weighted average shares         6,767,050     6,651,629
                                                           ==========    ==========
</TABLE>

                                       7

<PAGE>


                      FIRST RESERVE, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE  4 -       CASH HELD IN TRUST
                The Company maintains separately designated trust accounts for
                home buyers' earnest money, property owners, tenants, and other
                third parties. The Company holds such funds until sold
                properties are closed and leases have expired. Funds are
                disbursed in accordance with the settlement instructions or
                rental management agreements. These funds are not recorded in
                the Company's financial statements as they are held in a
                fiduciary capacity. At March 31, 2001, the Company held
                $8,401,191 of funds in trust.

NOTE 5 -        LEGAL AND OTHER SETTLEMENTS
                Included in legal and other settlement amounts are costs
                incurred by EWM in settling various disputes arising with
                customers or tenants in the ordinary course of business.

NOTE 6 -        CONTINGENT SHARES
                Under the terms of the September 30, 1998 merger agreement
                between the Company and Gerard International Realty, Inc.
                ("Gerard"), the former shareholders of Gerard would receive an
                additional 200,000 "contingent" shares of common stock of the
                Company, pending future gross commission income to be generated
                by the former shareholders of Gerard over a 24-month "review"
                period, beginning September 30, 1998. These contingent shares
                were held in escrow. At September 30, 1999, the former
                shareholders of Gerard met the gross commission income
                requirements stated in the agreement, and 200,000 of contingent
                shares were issued as common stock and valued at $1 per share.
                As a result, goodwill and common stock of $200,000 was recorded.

                Under the terms of the September 1, 2000 asset acquisition
                agreement between EWM and Ross, the sole shareholder of Ross
                would receive an additional 112,000 "contingent" shares of
                common stock of the Company, pending future gross commission
                income to be generated by the sole shareholder of Ross over a
                12- month "review" period, beginning September 1, 2000. Due to
                the contingent nature of the shares, the Company will record
                them as additional purchase price upon issuance of the shares.
                At March 31, 2001, the shareholder of Ross had met 46% of the
                gross commission income requirement stated in the agreement. If
                the review period had ended on March 31, 2001, no shares would
                be issued to this shareholder because there is no pro-rota
                allocation of shares, and they are not included in the basic or
                diluted earnings per share calculation.

                                       8

<PAGE>

                      FIRST RESERVE, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 7 -        EARNINGS PER SHARE
                Basic earnings per share ("EPS") was computed by dividing net
                income by the weighted average number of common shares
                outstanding during the period. Diluted EPS were determined on
                the assumption that the contingent shares where excised at the
                beginning of the period, or at time of issuance, if later.

                The following is the calculation of earnings per share:

<TABLE>
<CAPTION>
                                                                          Three-month        Three-month        Three-month
                                                                         period ended       period ended       period ended
                                                                        March 31, 2001     March 31, 2000     March 31, 1999
                                                                        --------------     --------------     ---------------
                         <S>                                              <C>                <C>                 <C>
                         Basic earnings per common share:
                            Numerator
                                Net income (loss) before
                                   extraordinary items applicable
                                   to common stockholders                 $  171,876         $ (158,803)         $  (93,366)
                               Extraordinary items, net                           --                 --                  --
                                                                          ----------         ----------          ----------
                               Income (loss) applicable to common
                                   stockholders                           $  171,876         $ (158,803)         $  (93,366)
                                                                          ==========         ==========          ==========

                            Denominator
                               Weighted average common shares              6,694,772          6,767,050           6,567,050
                                                                          ----------         ----------         -----------
                               Basic EPS                                  $     0.03         $     (.02)         $     (.01)
                                                                          ==========         ==========          ==========
</TABLE>

                Diluted earnings per common share:

<TABLE>
<CAPTION>
                                                                          Three-month        Three-month        Three-month
                                                                         period ended       period ended       period ended
                                                                        March 31, 2001     March 31, 2002     March 31, 2000
                                                                        --------------     --------------     --------------
                         <S>                                              <C>                <C>                 <C>

                        Numerator
                           Net income (loss) before extraordinary
                               items applicable to common
                               stockholders                               $  171,876         $ (158,803)         $  (93,366)
                           Extraordinary items, net                               --                 --                  --
                                                                          ----------         ----------          ----------
                           Income (loss) applicable to
                               common stockholders                        $  171,876         $ (158,803)         $  (93,366)
                                                                          ==========         ==========          ==========

                        Denominator
                           Weighted average common shares                  6,806,772          6,767,050           6,651,629
                                                                          ----------         ----------          ----------
                           Diluted EPS                                    $     0.03         $    (.02)          $     (.01)
                                                                          ==========         ==========          ==========
</TABLE>

                                       9

<PAGE>


                      FIRST RESERVE, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE  7 -       EARNINGS PER SHARE (CONTINUED)
                For the three-month periods ended March 31, 2001, 2000 and 1999,
                warrants to purchase 500,000 shares of common stock at $2.54,
                $2.57 and $2.73 per share, respectively, and 500,000 shares of
                common stock at $2.93, $2.96 and $3.16 per share, respectively,
                were outstanding but were not included in the computation of
                diluted EPS because the warrants' exercise price was greater
                than the average market price of the common shares. The
                warrants, which expire on August 31, 2003, were still
                outstanding at the end of the periods.

NOTE 8 -        BUSINESS SEGMENT INFORMATION
                The Company's operations are principally managed on a product
                services basis and are comprised of four reportable segments:
                Esslinger, Wooten & Maxwell, Inc. ("EWM"), Embassy Financial
                Services, Inc. ("Embassy"), Columbia Title of Florida, Inc.
                ("Columbia"), and First Reserve Insurance, Inc. ("FRINS"). EWM's
                product services consist of residential and commercial real
                estate brokerage and relocation services. Embassy's product
                services have been in the capacity of a mortgage lender and
                mortgage broker in the South Florida area, specializing in
                conventional, FHA and VA mortgages. Columbia's product has been
                in the capacity of a title company. FRINS has been in the
                capacity of insurance broker. Revenue, net income (loss) EBITDA,
                which is defined as earnings before interest, taxes,
                depreciation and amortization, and identifiable assets for these
                segments are as follows:

<TABLE>
<CAPTION>
                                                     Three-month period ended March 31, 2001
                                                     ---------------------------------------
                                                                                            First
                                     Esslinger,         Embassy          Columbia          Reserve         First
                                     Wooten &          Financial         Title of         Insurance       Reserve,
                                   Maxwell, Inc.     Services, Inc.     Florida, Inc.        Inc.           Inc.            Total
                                   -------------     --------------     -------------     ---------       --------       ----------
                <S>                  <C>               <C>               <C>                <C>           <C>            <C>
                Revenue              $8,775,891        $  451,028        $  281,545         $3,956        $     --       $9,512,420
                EBITDA               $  332,904        $   69,133        $   (2,407)        $3,935        $(61,473)      $  342,092
                Net Income
                    (loss)           $  143,334        $   38,566        $   22,978         $2,975        $(35,977)      $  171,876
                Identifiable
                   assets at
                   period end        $4,836,330        $3,092,583        $  241,381         $6,960        $216,210       $8,393,464
</TABLE>


<TABLE>
<CAPTION>
                                                     Three-month period ended March 31, 2000
                                                     ---------------------------------------
                                       Esslinger,          Embassy          Columbia          First
                                       Wooten &           Financial         Title of         Reserve,
                                     Maxwell, Inc.      Services, Inc.    Florida, Inc.        Inc.             Total
                                     -------------      -------------     -------------      --------         ----------
                <S>                   <C>                  <C>              <C>              <C>              <C>
                Revenue               $5,463,030           $244,056         $153,186         $     --         $5,860,272
                EBITDA                $   14,117           $ (7,750)        $(58,840)        $     23         $  (52,450)
                Net loss              $  (49,466)          $(17,384)        $(52,162)        $(39,791)        $ (158,803)
                Identifiable
                   assets at
                   period end         $3,407,420           $528,051         $146,339         $254,689         $4,336,499
</TABLE>

                                       10

<PAGE>


                      FIRST RESERVE, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 8 -            BUSINESS SEGMENT INFORMATION (CONTINUED)

<TABLE>
<CAPTION>
                                                     Three-month period ended March 31, 1999
                                                     ---------------------------------------
                                       Esslinger,          Embassy          Columbia          First
                                       Wooten &           Financial         Title of         Reserve,
                                     Maxwell, Inc.      Services, Inc.    Florida, Inc.        Inc.             Total
                                     -------------      -------------     -------------      --------         ----------
                <S>                   <C>                  <C>              <C>              <C>              <C>
                Revenue               $4,746,755           $275,574         $     --         $     --         $5,022,329
                EBITDA                $   25,212           $(11,684)        $     --         $(43,427)        $  (29,899)
                Net loss              $  (16,438)          $(14,684)        $     --         $(62,244)        $  (93,366)
                Identifiable
                   assets at
                   period end         $2,544,407           $289,163         $279,366           $ 94,623       $3,207,559
</TABLE>


NOTE 9 -            REGULATORY MATTERS

                    HUD Requirements
                    Embassy is a non-supervised loan correspondent for purposes
                    of the U.S. Department of Housing and Urban Development
                    ("HUD"). As such, 24 -CFR Part 202 of the HUD handbook
                    requires Embassy to have an Adjusted Net Worth of at least
                    $50,000. Embassy is in compliance with this requirement.

                    State of Florida Requirements
                    Embassy is also a licensed mortgage lender under Chapter 494
                    of the State of Florida. As such, Embassy is required to
                    have a minimum net worth of $250,000. Embassy is in
                    compliance with this requirement.

                                       11

<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1.           Financial Statements.

Immediately following the signature page in this Form 10-QSB.

Item 2.           Management's Discussion and Analysis of  Financial Condition
                  and Results of Operations.

The "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included herein should be read in conjunction with our Condensed
Consolidated Financial Statements, as of March 31, 2001, and the related notes
to the Condensed Consolidated Financial Statements, along with our Consolidated
Financial Statements as of December 31, 2000 and March 31, 2001, and the related
Notes to Consolidated Financial Statements. Our Financial Statements have been
prepared in accordance with generally accepted accounting principles in the U.S.

The financial information in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" refers to our continuing operations.

Results of Operations

Revenues. Our revenues increased approximately 62.3% for the three-month period
ended March 31, 2001, over those for the three-month period ended March 31,
2000. The percentage increase resulted from the following sources: (i) the
operations of Ross & Associates, Inc. ("Ross Group") and The Daniels Group, Inc.
("Daniels Group") both acquired in September, 2000; (ii) the operations of our
new office in Weston, Florida; and (iii) improved sales from our existing
offices.

Operating Expenses. Operating expenses increased to approximately $9.3 million
for the three- month period ended March 31, 2001 versus $6.0 million for the
three-month period ended March 31, 2000. The significant components of our
operating expenses are: (i) commissions to sales people (68%); (ii) officer and
staff salaries (9.7%); (iii) office rental costs (4.2%); (iv) advertising
expenses (5.7%); (v) promotional expenses (0.5%) and; (vi) insurance (1.3%). Our
operating expenses increased as a result of the operations of the Ross Group and
the Daniels Group, along with increased expenses as a result of the opening of
the Weston office.

Interest. Interest income increased from $6,369 for the three-month period ended
March 31, 2000 to $37,707 for the three-month period ended March 31, 2001,
primarily due to increased cash balances.

Net Gain from Continuing Operations. We had a net gain from operations of
approximately $198,000 for the three-month period ended March 31, 2001 as
compared to a net loss of approximately ($150,000) for the three-month period
ended March 31, 2000. This increase from

                                       12

<PAGE>

continuing operations resulted primarily as a result of the inclusion of the
operations of the Ross Group, the Daniels Group and the Weston office.

Liquidity and Capital Resources

Cash used in operating activities was approximately $323,000 for the three-month
period ended March 31, 2001. This was primarily due to the increase of mortgage
loans held for sale.

Cash used for investing activities was approximately $45,000 for the three-month
period ended March 31, 2001. This was primarily due to the purchases of property
and equipment.

Cash used in financing activities was approximately $747,000 for the three-month
period ended March 31, 2001, principally due to an increase from the warehouse
line of credit as a result of the increase in mortgage loans held for sale.

At March 31, 2001, we had long-term obligations payable of approximately
$231,000. We also had a $3.5 million "warehouse" line of credit available to
fund loans to be made in connection with Embassy's operations. Each "warehouse"
loan is fully backed by a permanent "take-out" loan commitment from a national
institutional lender in residential financing. As of March 31, 2001, the balance
of this "warehouse" line of credit was approximately $2,570,000 with a
corresponding asset of "mortgage loans held for sale" of $2,589,000.

At March 31, 2001, we had shareholder equity of approximately $4,138,000. For
the three- month period ended March 31, 2001, working capital (current assets
less current liabilities) was approximately $1,120,000, primarily as a result of
a significant increase in cash, mortgage loans held for sale, and long-term
debt.

Our third office in Broward County is scheduled to open in June, 2001. This
office will be located in Fort Lauderdale, Florida and will specifically target
the "Las Olas" market, which is located near downtown Fort Lauderdale. Although
we began to incur expenses in connection with the opening of the Las Olas office
in April, 2001, we anticipate that this new office, along with our existing
Broward County offices, will increase opportunities to substantially increase
sales. We also anticipate that our title and insurance businesses will continue
to be profitable during 2001, as opposed to the net loss posted for this line of
business in 2000, and will contribute to our cash flow and our overall financial
performance.

Seasonality

Our operations are principally based on the residential real estate market in
South Florida. These markets have historically been seasonal with generally
higher sales in the second and third fiscal quarters. Therefore, the results of
any interim period is not necessarily indicative of the results that might be
expected during a full fiscal year.

                                       13

<PAGE>

Forward Looking Statements

From time to time, we make statements about our future results in this Form
10-QSB that may constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are based
on our current expectations and the current economic environment. We caution you
that these statements are not guarantees of future performance. They involve a
number of risks and uncertainties that are difficult to predict. Our actual
results could differ materially from those expressed or implied in the
forward-looking statements. Important assumptions and other important factors
that could cause our actual results to differ materially from those in the
forward-looking statements, include, but are not limited to: (i) the continued
growth in the residential real estate market in South Florida; (ii) the general
availability of home mortgage financing at favorable rates; (iii) continued
positive economic climate in the U.S.; (iv) competition in our existing lines of
business; and (v) our ability to obtain and maintain working capital, whether
internally generated or from financing sources (on acceptable terms) in order to
finance our growth strategy.

                                     PART II
                                OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K.

         (a)      Exhibits.

                  None.

         (b)      Reports on Form 8-K.

                  None.

                                       14

<PAGE>

                                   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 thereunto duly authorized.

Date: May 21, 2001                 FIRST RESERVE, INC.

                                   By:      /s/ Ronald A. Shuffield
                                       -------------------------------------
                                          Ronald A. Shuffield, President and
                                          Principal Financial Officer


                                       15