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

                           FORM 10-QSB

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

              For the Quarter Ended June 30, 2001

                                OR

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

     For the transition period from            to

                  Commission File Number 0-24633

                     RAKO CAPITAL CORPORATION
 ---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)

            Nevada                          91-0853320
-------------------------------         -----------------
(State or other jurisdiction of         (I.R.S. Employer
incorporation or organization)          Identification No.)

     56 W. 400 S. Ste. 220,
      Salt Lake City, Utah                     84101
  --------------------------------------     ----------
 (Address of principal executive offices)     Zip code

Registrant's telephone no., including area code:  (801) 322-3401

     Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 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.
Yes   X   No

               APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.

           Class               Outstanding as of June 30, 2001.
Common Stock, $.001 par value              2,525,030


<PAGE>

                          RAKO CAPITAL CORPORATION
                        (A Development Stage Company)

                            FINANCIAL STATEMENTS

                    June 30, 2001 and December 31, 2000


                              C O N T E N T S
PART I

Balance Sheets                                                          3

Statements of Operations                                                4

Statements of Stockholders' Equity (Deficit)                            5

Statements of Stockholders' Equity (Deficit) Continued                  6

Statements of Cash Flows                                                7

Statements of Cash Flows (Continued)                                    8

Notes to the Financial Statements                                       9

PART II

Item 1  Legal Proceedings                                              10

Item 2  Changes in Securities                                          10

Item 3  Defaults in Senior Securities                                  10

Item 4  Submission of Matters to a Vote of Security Holders            10

Item 5  Other Information                                              10

Item 6  Exhibits and Reports on Form 8-K                               10







                          RAKO CAPITAL CORPORATION
                       (A Development Stage Company)
                               Balance Sheets


                                   ASSETS
<TABLE>

                                                     June 30,    December 31,
                                                      2001           2000

CURRENT ASSETS

                                             <c>           <c>
Cash                                              $     -        $     -
                                                  ----------     ----------
Total Current Assets                                    -              -
                                                  ----------     ----------
TOTAL ASSETS                                      $     -        $     -
                                                  ===========    ==========

                 LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable                                  $    338       $    338
                                                  -----------    --------
Total Current Liabilities                              338            338
                                                  -----------    --------
STOCKHOLDERS' EQUITY (DEFICIT)

Common stock at $0.001 par value; authorized
 70,000,000 common shares and 20,000,000
 preferred shares; 2,525,030 and 1,025,030
 common shares issued and outstanding,
 respectively                                           2,525       1,025
Additional paid-in capital                             99,412      98,187
Deficit accumulated during the development stage     (102,275)    (99,550)
                                                  -----------     --------
Total Stockholders' Equity (Deficit)                    (338)        (338)
                                                  -----------     --------
TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY (DEFICIT)                   $     -         $     -
                                                  ===========     ==========

</TABLE>

 The accompanying notes are an integral part of these financial statements.


<PAGE>
                            RAKO CAPITAL CORPORATION
                         (A Development Stage Company)
                           Statements of Operations
                                 (Unaudited)
<TABLE>

                                                                     From
                                                                 Inception on
                             For the            For the            October 9,
                        Three Months Ended  Six Months Ended      1968 Through
                            June 30,            June 30,            June 30,
                         2001      2000      2001      2000           2001
                         ------------------------------------------------------

                     <c>       <c>       <c>       <c>            <c>

REVENUE                  $    -    $    -    $    -    $    -         $    -

EXPENSES                   1,125     1,814     2,725     3,344        102,275
                         --------  --------  --------  --------       ---------
NET LOSS                 $(1,125)  $(1,814)  $(2,725)  $(3,344)     $(102,275)
                         ========  ========  ========  ========     ==========
BASIC LOSS PER SHARE       (0.00)    (0.00)    (0.00)    (0.00)
                         ========  ========  ========  ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>


                                      RAKO CAPITAL CORPORATION
                                    (A Development Stage Company)
                             Statements of Stockholders' Equity (Deficit)
                       From Inception on October 9, 1968 Through June 30, 2001
<TABLE>
                                                                               Deficit
                                                                              Accumulated
                                                             Additional       During the
                                        Common Stock          Paid-in         Development
                                     Shares       Amount       Capital           Stage
                                    -----------------------------------------------------

                                <c>           <c>            <c>            <c>

Inception on October 9, 1968             -    $      -        $     -          $     -

Common stock issued for mining
 claims recorded at predecessor
 cost of $0.00 per share             400,000        400           (400)              -

Common stock issued for services
 at $0.15 per share                  400,000        400           59,600             -
Common stock issued for cash
 at $0.45 per share                   14,734         15            6,615             -

Costs associated with stock offering      -          -              (994)            -

Common stock issued for mining
 claims recorded at predecessor
 cost of $0.075 per share            333,334        333            24,667            -

Net loss for the period from inception
 on October 9, 1968 through
 December 31, 1995                        -          -                 -        (90,636)
                                    ---------    ----------      ----------    ---------
Balance, December 31, 1995          1,148,068      1,148           89,488       (90,636)

Cancellation of common stock        (123,024)       (123)             123            -

Fractional shares adjustment            (14)          -                -             -

Capital contributed for payment of
 expenses                                -            -             2,461            -

Net loss for the year ended
 December 31, 1996                       -            -                -         (2,461)
                                    ----------    ----------      ----------    ---------
Balance, December 31, 1996         1,025,030       1,025           92,072        (93,097)

Net loss for the year ended
 December 31, 1997                       -            -                -              -
                                   ----------     ----------      ----------    ---------
Balance, December 31, 1997         1,025,030       1,025           92,072        (93,097)

Capital contributed for payment of
 expenses                                -            -             1,574             -

Net loss for the year ended
 December 31, 1998                       -            -                -         (1,574)
                                   -----------    ----------      -----------   ---------
Balance, December 31, 1998         1,025,030   $   1,025        $   93,646      $(94,671)
                                   -----------    ----------      -----------   ---------
</TABLE>

The accompanying notes are an integral part of these financial statements.


<PAGE>



                                     RAKO CAPITAL CORPORATION
                                   (A Development Stage Company)
                      Statements of Stockholders' Equity (Deficit) (Continued)
                       From Inception on October 9, 1968 Through June 30, 2001
<TABLE>

                                                                                Deficit
                                                                              Accumulated
                                                                Additional    During the
                                        Common Stock             Paid-in      Development
                                     Shares         Amount        Capital          Stage
                                    -----------------------------------------------------


                                  <c>            <c>             <c>            <c>

Balance, December 31, 1998         1,025,030      $1,025        $  93,646        (94,671)

Capital contributed for payment of
 expenses                                -            -             1,820            -

Net loss for the year ended
 December 31, 1999                       -            -                -          (1,908)
                                   ---------     ---------      ----------       --------

Balance, December 31, 1999         1,025,030       1,025           95,466        (96,579)

Capital contributed for payment of
 expenses                               -            -             2,721           -

Net loss for the year ended
 December 31, 2000                       -           -              -             (2,971)
                                   ---------     ---------      ----------       --------
Balance, December 31, 2000        1,025,030      $   1,025     $   98,187        (99,550)

Common stock issued in lieu of
 debt                             1,500,000          1,500          1,225           -

Net loss for six months ended
 June 30, 2001 (unaudited)              -            -                -          (2,725)
                                   ---------     ----------     ----------      ---------

Balance, June 30, 2001            2,525,030      $ 2,525       $  99,412      $(102,275)
(unaudited)                        =========     ==========     ==========     ==========

</TABLE>
The accompanying notes are an integral part of these financial statements.


<PAGE>


                                          RAKO CAPITAL CORPORATION
                                        (A Development Stage Company)
                                          Statements of Cash Flows
<TABLE>                                         (Unaudited)



                                                                     From
                                                                 Inception on
                                     For the            For the            October 9,
                                Three Months Ended  Six Months Ended      1968 Through
                                    June 30,            June 30,            June 30,
                                 2001      2000      2001      2000           2001
                                 ------------------------------------------------------

                            <c>        <c>        <c>        <c>         <c>

CASH FLOWS FROM
 OPERATING ACTIVITIES

Net loss                        $ (1,125)  $ (1,814)  $ (2,725)  $ (3,344)   $ (102,275)
Adjustments to reconcile net
loss to net cash (used) by
 operating activities:
Stock issued for services             -           -         -          -         60,000
Increase in accounts payable       1,125         314     2,725      1,726        28,063
                                 --------    --------  --------   --------     ---------
Net Cash (Used) by Operating
 Activities                           -       (1,500)       -      (1,618)      (14,212)
                                 --------    --------  --------   --------     ---------

CASH FLOWS FROM                       -           -         -          -             -
 INVESTING ACTIVITIES            --------    --------  --------   --------     ---------

CASH FLOWS FROM
 FINANCING ACTIVITIES

Issuance of common stock              -           -         -          -          5,636
For cash
Expenses paid on
 Company's behalf                     -        1,500        -       1,618         8,576
                                 --------    --------  --------   --------     ---------
Net Cash Provided by
 Financing Activities                 -        1,500        -       1,618        14,212
                                 --------    --------  --------   --------     ---------
INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                 -           -         -          -             -

CASH AND CASH EQUIVALENTS
 AT BEGINNING OF PERIOD               -           -         -          -             -
                                 --------    --------  --------    --------    ---------

CASH AND CASH EQUIVALENTS
 AT END OF PERIOD                $    -     $     -    $    -     $    -        $    -
                                 =========  =========  ========   ========    ==========

Cash Paid For:

  Interest                       $    -     $    -     $    -     $    -        $    -
  Income taxes                   $    -     $    -     $    -     $    -        $    -


SUPPLEMENTAL SCHEDULE OF
NON-CASH FINANCING ACTIVITIES

  Stock issued for services      $    -     $    -     $    -     $    -        $60,000
  Stock issued for mining claims $    -     $    -     $    -     $    -        $25,000
  Stock issued in lieu of debt   $ 2,725    $    -     $ 2,725    $    -        $ 2,725

</TABLE>

The accompanying notes are an integral part of these financial statements.

<PAGE>


                       RAKO CAPITAL CORPORATION
                    (A Development Stage Company)
                  Notes to the Financial Statements
                 June 30, 2001 and December 31, 2000


NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS

On October 9, 1968, Bell Silver Mining and Milling Corporation was
incorporated under the Laws of Idaho with the purpose of developing mining
claims.  On the date of incorporation, 10,000,000 shares of $0.10 par value
common stock were authorized.

On March 3, 1969, Bell Silver Mining and Milling Corporation changed its
name to Silver Strike Mining Co. Inc.  The number of shares of common stock
authorized was changed from 10,000,000 shares of $0.10 par value common
stock to 5,000,000 shares of $0.10 par value common stock.

On May 17, 1973, Silver Strike Mining and Milling Co. Inc, changed its name
to Rako Corporation.

On March 25, 1996, the Articles of Incorporation were amended to change the
par value of the common stock to $0.005 and the number of authorized shares
to 100,000,000.

On May 15, 1996, the Articles of Incorporation were amended to change the
par value of the common stock to $0.001 and the number of authorized shares
to 50,000,000 common and 20,000,000 preferred.

On April 10, 2001, the Board of Directors of the Company approved a merger
with Rako Capital Corporation, a Nevada corporation.  Rako Capital Corporation
became the surviving entity which effectively changed the state of domicile
from Idaho to Nevada.  Shares were exchanged on a one-for-one basis.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Accounting Method

The Company's financial statements are prepared using the accrual method of
accounting.  The Company has elected a calendar year end.

b. Provision for Taxes

No provision for income taxes has been made due to the inactive status of
the Company.  The Company has net operating loss carryovers of
approximately $10,600 which expire in 2020.  The potential tax benefit of
the loss carryovers has been offset in full by a valuation allowance.

c. Cash Equivalents

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.


<page>

                      RAKO CAPITAL CORPORATION
                    (A Development Stage Company)
                  Notes to the Financial Statements
                 June 30, 2001 and December 31, 2000

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

d.  Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.

e.  Basic Loss Per Common Share

Basic loss per common share has been calculated based on the weighted
average number of shares of common stock outstanding during the period.
<TABLE>
                                   For the                  For the
                             Three Months Ended         Six Months Ended
                                   June 30,                 June 30,
                          ------------------------------------------------
                               2001        2000         2001         2000
                          ------------------------------------------------

                       <c>         <c>          <c>          <c>


Numerator  loss            $ (1,125)    $ (1,814)    $ (2,725)    $ (3,344)
Denominator - weighted
average number of
  shares outstanding       1,125,030    1,025,030    1,525,030    1,025,030
                          -----------   -----------  -----------  -----------
Loss per share             $  (0.00)    $  (0.00)    $  (0.00)    $  (0.00)
                          ===========   ===========  ===========  ===========
</TABLE>

f. Unaudited Financial Statements

The Accompanying unaudited financial statements include all of the adjustments
which, in the opinion of management, are necessary for a fair presentation.
Such adjustments are of a normal recurring nature.

NOTE 3  GOING CONCERN

The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business.  The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern.  The Company is
seeking a merger with an existing, operating Company. Currently management
has committed to covering all operating and other costs until a merger is
completed.

 NOTE 4  STOCK TRANSACTIONS

On October 10, 1968, the Board of Directors issued 400,000 shares of common
stock for mining claims received from the founder of the Company.  The
claims were recorded at predecessor cost of $-0-.

On October 10, 1968, the Board of Directors issued 400,000 shares of common
stock for services rendered during the organization of the Company.

On October 28, 1969, the Board of Directors initiated a public offering in
which 14,734 shares of common stock were sold at a gross price of $0.45 per
share.

On September 13, 1984, the Board of Directors issued 333,334 shares of
common stock for mining claims which were recorded at predecessor cost of
$0.075 per share.

On April 10, 1996, the Company canceled 123,024 shares of common stock.

On May 15, 1996, the shareholders effected a 1-for-3 reverse stock split of
all the issued and outstanding common stock.
<PAGE>


                                RAKO CORPORATION
                          (A Development Stage Company)
                        Notes to the Financial Statements
                      March 31, 2001 and December 31, 2000


NOTE 4  STOCK TRANSACTIONS (Continued)

On March 17, 1998, the shareholders effected a 2-for-1 forward stock split
of all the issued and outstanding common stock.

On May 3, 2001, the Company authorized and issued 1,500,000 shares of common
stock in lieu of debt totaling $2,725 owed to H. Deworth Williams, a
shareholder who has been paying the Company's expenses, including legal,
accounting, rent and all other office expenses.

The accompanying financial statements reflect the stock splits on a
retroactive basis.

NOTE 5  FAILED ACQUISITION

On May 9, 1996, the shareholders voted to acquire all of the issued and
outstanding shares of Spencer Entertainment, Inc., a Nevada Corporation, in
exchange for the Company's authorized, but previously unissued common stock.
On June 11, 1996, the Company issued 6,300,000 shares as part of the terms of
this agreement, however, on November 22, 1996, the Company completed a
recission agreement regarding the plan of reorganization and acquisition
agreement between the Company and Spencer Entertainment, Inc. and canceled
the 6,300,000 shares that were issued.  The recission has been reflected in
the financial statements on a retroactive basis.

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

     The following information should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this Form 10-QSB.

     The Company is considered a development stage company with no assets or
capital and with no significant operations or income since approximately 1986.
In July 1998, the Company filed with the Securities and Exchange Commission a
registration statement on Form 10-SB.  All costs and expenses associated with
the registration statement have been paid for by a shareholder of the Company.
It is anticipated that the Company will require only nominal capital to
maintain the corporate viability of the Company and necessary funds will most
likely be provided by the Company's officers and directors in the immediate
future.  However, unless the Company is able to facilitate an acquisition of
or merger with an operating business or is able to obtain significant outside
financing, there is substantial doubt about its ability to continue as a going
concern.

Plan of Operation

    During the next 12 months, the Company will actively seek out and
investigate possible business opportunities with the intent to acquire or
merge with one or more business ventures. Because the Company lacks funds, it
may be necessary for the officers and directors to either advance funds to the
Company or to accrue expenses until such time as a successful business
consolidation can be made.  Management intends to hold expenses to a minimum
and to obtain services on a contingency basis when possible.  Further, the
Company's directors will defer any compensation until such time as an
acquisition or merger can be accomplished and will strive to have the business
opportunity provide their remuneration.  However, if the Company engages
outside advisors or consultants in its search for business opportunities, it
may be necessary for the Company to attempt to raise additional funds.  As of
the date hereof, the Company has not made any arrangements or definitive
agreements to use outside advisors or consultants or to raise any capital.  In
the event the Company does need to raise capital, most likely the only method
available to the Company would be the private sale of its securities.  Because
of the nature of the Company as a development stage company, it is unlikely
that it could make a public sale of securities or be able to borrow any
significant sum from either a commercial or private lender.  There can be no
assurance that the Company will be able to obtain additional funding when and
if needed, or that such funding, if available, can be obtained on terms
acceptable to the Company.

    The Company does not intend to use any employees, with the possible
exception of part-time clerical assistance on an as-needed basis.  Outside
advisors or consultants will be used only if they can be obtained for minimal
cost or on a deferred payment basis.  Management is confident that it will be
able to operate in this manner and to continue its search for business
opportunities during the next twelve months.

Net Operating Loss

    The Company has accumulated approximately $10,600 of net operating loss
carryforwards as of June 30, 2001, which may be offset against taxable income
and income taxes in future years.  The use of these losses to reduce future
income taxes will depend on the generation of sufficient taxable income prior
to the expiration of the net operating loss carryforwards.  The carry-forwards
expire in the year 2020.  In the event of certain changes in control of the
Company, there will be an annual limitation on the amount of net operating
loss carryforwards which can be used.  No tax benefit has been reported in the
financial statements for the year ended December 31, 2000 or the nine month
period ended June 30, 2001 because there is a 50% or greater chance that the
carryforward will not be used.  Accordingly, the potential tax benefit of the
loss carryforward is offset by a valuation allowance of the same amount.

Inflation

    In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the
Company successfully completes an acquisition or merger.  At that time,
management will evaluate the possible effects of inflation on the Company
related to it business and operations following a successful acquisition or
merger.

Risk Factors and Cautionary Statements

    This report contains certain  forward-looking statements.  The Company
wishes to advise readers that actual results may differ substantially from
such forward-looking statements.  Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in or implied by the statements, including, but not limited to, the
following: the ability of the Company search for appropriate business
opportunities and subsequently acquire or merge with such entity, to meet its
cash and working capital needs, the ability of the Company to maintain its
existence as a viable entity, and other risks detailed in the Company's
periodic report filings with the Securities and Exchange Commission.



                             PART II

Item 1.  Legal Proceedings

    There are presently no other material pending legal proceedings to which
the Company or any of its subsidiaries is a party or to which any of its
property is subject and, to the best of its knowledge, no such actions against
the Company are contemplated or threatened.

Item 2.  Changes In Securities

    On May 3, 2001, the Company authorized and issued 1,500,000 shares of
common stock in lieu of debt totaling $2,725 owed to H. Deworth Williams, a
shareholder who has been paying the Company's expenses, including legal,
accounting, rent and all other office expenses.  The shares were issued in
reliance upon exemption from registration pursuant to section 4(2) of the
Securities Act of 1933.


Item 3.  Defaults Upon Senior Securities

    This Item is not applicable to the Company.

Item 4.  Submission of Matters to a Vote of Security Holders

    On May 3, 2001 the registrant held a Special Meeting of the Shareholders.
At the meeting the shareholders voted to:

    Approve the proposal to change the registrants State of Incorporation from
the State of Idaho to the State of Nevada with 832,536 shares voting for the
proposal, zero shares withholding, 666 shares voting against and 3,064 shares
abstaining.

    Elect Geoff Williams and Bobbi Heywood to serve on the Board of Directors
with 835,600 shares voting for the proposal, 666 shares withholding, zero
shares voting against and zero shares abstaining.  Mr. Williams and Ms.
Heywood are the sole Directors of the Company.

    Approve the proposal to issue 1,500,000 shares of the registrant's common
stock to H. Deworth Williams as consideration for Company expenses that he
has paid.  The proposal passed with 832,536 shares voting for, zero shares
withholding, 666 shares voting against and 3,064 shares abstaining.


    Approve the appointment of HJ & Associates as independent auditors with
832,536 shares voting for the proposal, zero shares withholding, 666 shares
voting against and 3,064 shares abstaining.

Item 5.  Other Information

    This Item is not applicable to the Company.

Item 6.  Exhibits and Reports on Form 8-K

    (a)  Reports on Form 8-K

             No report on Form 8-K was filed by the Company during the
    three month period ended June 30, 2001.


<PAGE>



                           SIGNATURES


    In accordance with the requirements of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                            RAKO CORPORATION

Date:  August 1, 2001                  By:  /S/ Geoffery Williams
                                            GEOFFERY WILLIAMS
                                            President
                                            and Director



Date:   August 1, 2001                   By:  /S/ Bobbi Heywood
                                            BOBBI HEYWOOD
                                            Secretary/Treasurer,  and
                                            Director

<PAGE>