FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

(Mark One)

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

For the quarterly period ended September 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 0-24829


                                FTS APPAREL, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)



         Colorado                                      84-1416864
         --------                                      ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


212 North Wahsatch, Suite 205, Colorado Springs, CO                      80903
-----------------------------------------------------                   ------
      (Address of principal executive office)                         (Zip Code)

                                 (719) 630-0980
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by 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. Yes X    No
                                      ---     ---

The  number of shares  outstanding  of each of the  Issuer's  classes  of common
equity as of November 6, 2001 is set forth below:

         Common Stock, par value $.001                 8,645,951
         -----------------------------              ----------------
                  Title of Class                    Number of Shares


Transitional Small Business Disclosure Format   yes     no X
                                                   ---    ---

                                        i
<PAGE>




                                FTS Apparel, Inc.

                                      Index


                                     Part I

Item 1.      Financial Statements

             Balance Sheet as of September 30, 2001 (unaudited)              1

             Statements of Operations for the Three and Nine Months
             Ended September 30, 2001 and 2000 (unaudited)                   2

             Statements of Cash Flows for the Nine Months Ended
             September 30, 2001 and 2000 (unaudited)                         3

             Notes to Financial Statements (unaudited)                       4

Item 2.      Management's Discussion and Analysis or Plan of Operation       5

             Signatures                                                      9

                                        i
<PAGE>

                                FTS APPAREL, INC.
                                  BALANCE SHEET
                               SEPTEMBER 30, 2001
                                   (UNAUDITED)

                                     ASSETS

CURRENT ASSETS
      Cash                                                       $    13,219
      Accounts receivable                                             78,226
      Due from employee                                                  283
      Inventory                                                       60,475
      Prepaid expenses                                               135,104
                                                                 -----------

                Total current assets                                 287,307
                                                                 -----------

PROPERTY AND EQUIPMENT, net                                           33,082
                                                                 -----------

OTHER ASSETS
      Deposits                                                         8,866
                                                                 -----------

                                                                 $   329,255
                                                                 ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts payable                                           $    45,347
      Accrued expenses                                                51,844
      Deferred income - trade agreements                               2,194
                                                                 -----------

                Total current liabilities                             99,385
                                                                 -----------


STOCKHOLDERS' EQUITY
      10% Convertible preferred stock, Series A, $0.01 par
        value, 150,000 shares authorized, 50,000 shares
        issued and outstanding                                        50,000
      Preferred stock, $0.01 par value, 4,850,000 undesignated
        shares authorized                                               --
      Common stock, $0.001 par value, 25,000,000 shares
        authorized, 8,645,951 shares issued
        and outstanding                                                8,646
      Additional paid in capital                                   4,254,462
      Accumulated deficit                                         (4,083,238)
                                                                 -----------

                Total stockholders' equity                           229,870
                                                                 -----------

                                                                 $   329,255
                                                                 ===========

   The Notes to Financial Statements are an integral part of these statements.

                                        1
<PAGE>

<TABLE>
                                FTS APPAREL, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<CAPTION>


                                                              THREE MONTHS ENDED             NINE MONTHS ENDED
                                                          --------------------------    --------------------------
                                                         SEPTEMBER 30,  SEPTEMBER 30,  SEPTEMBER 30,  SEPTEMBER 30,
                                                             2000            2000          2000           2000
                                                          -----------    -----------    -----------    -----------

REVENUES
<S>                                                       <C>            <C>            <C>            <C>
     Sales of merchandise                                 $   172,409    $ 1,089,311    $   503,349    $ 1,222,110
     Trade agreements                                            --            3,430          4,665         29,390
                                                          -----------    -----------    -----------    -----------

                                                              172,409      1,092,741        508,014      1,251,500

 COST OF GOODS SOLD                                           144,863        772,967        463,000        877,829
                                                          -----------    -----------    -----------    -----------

 GROSS PROFIT                                                  27,546        319,774         45,014        373,671
                                                          -----------    -----------    -----------    -----------

 GENERAL AND ADMINISTRATIVE EXPENSES                          284,142        472,814        933,577      1,295,601
                                                          -----------    -----------    -----------    -----------

 (LOSS) FROM OPERATIONS                                      (256,596)      (153,040)      (888,563)      (921,930)
                                                          -----------    -----------    -----------    -----------

OTHER INCOME (EXPENSE)
    Interest income                                               142          4,654          3,423          8,772
    Interest expense                                             (411)        (9,663)          (624)       (12,514)
    Loss on write-down of inventory                           (31,979)          --         (111,979)          --
                                                          -----------    -----------    -----------    -----------

                                                              (32,248)        (5,009)      (109,180)        (3,742)
                                                          -----------    -----------    -----------    -----------

NET (LOSS)                                                $  (288,844)   $  (158,049)   $  (997,743)   $  (925,672)
                                                          ===========    ===========    ===========    ===========

PER SHARE INFORMATION:
WEIGHTED AVERAGE SHARES OUTSTANDING (BASIC AND DILUTED)     8,645,951      7,782,038      8,759,951      6,320,137
                                                          ===========    ===========    ===========    ===========

NET (LOSS) PER COMMON SHARE (BASIC AND DILUTED)           $     (0.03)   $     (0.02)   $     (0.11)   $     (0.15)
                                                          ===========    ===========    ===========    ===========
</TABLE>

   The Notes to Financial Statements are an integral part of these statements.

                                        2
<PAGE>

<TABLE>
                                FTS APPAREL, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<CAPTION>

                                                            NINE MONTHS ENDED     NINE MONTHS ENDED
                                                           SEPTEMBER 30, 2001     SEPTEMBER 30, 2000
                                                             --------------       ---------------

OPERATING ACTIVITIES
<S>                                                           <C>                  <C>
        Net cash flow (used in) operating activities          $    (309,855)       $    (1,324,631)
                                                              --------------       ----------------

INVESTING ACTIVITIES
     Acquisition of fixed assets                                     (2,940)               (44,074)
                                                              --------------       ----------------
        Net cash (used in) investing activities                      (2,940)               (44,074)
                                                              --------------       ----------------

FINANCING ACTIVITIES
     Common stock issued, net of offering costs                           -              1,000,000
     Proceeds from note payable                                           -                 78,393
     Repayment of notes payable                                           -                (64,995)
     Proceeds from line-of-credit                                         -                839,370
     Payments on line-of-credit                                           -               (239,812)
     Payment of preferred dividends                                  (1,411)                     -
                                                              --------------       ----------------
        Net cash provided by (used in) financing activities          (1,411)             1,612,956
                                                              --------------       ----------------

        Net increase (decrease) in cash                            (314,206)               244,251

CASH AT BEGINNING OF PERIOD                                         327,425                  5,687
                                                              --------------       ----------------

CASH AT END OF PERIOD                                         $      13,219        $       249,938
                                                              ==============       ================
</TABLE>

   The Notes to Financial Statements are an integral part of these statements.

                                        3
<PAGE>

                                FTS APPAREL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001
                                   (UNAUDITED)


(1)  Basis Of Presentation

The accompanying unaudited financial statements have been prepared in accordance
with accounting  principles  generally  accepted in the United States of America
("GAAP") for interim  financial  information  and Item 310(b) of Regulation S-B.
They do not include all of the  information  and footnotes  required by GAAP for
complete  financial  statements.  In the opinion of management,  all adjustments
(consisting only of normal  recurring  adjustments)  considered  necessary for a
fair presentation have been included.  The results of operations for the periods
presented are not  necessarily  indicative of the results to be expected for any
other quarter or the full year.  These  financial  statements  should be read in
conjunction with the audited financial  statements of the Company as of December
31, 2000 and for the two years then ended, including notes thereto,  included in
the Company's Form 10-KSB.

(2)  Earnings Per Share

The  Company  calculates  net  (loss)  per share as  required  by SFAS No.  128,
"Earnings per Share." Basic earnings (loss) per share are calculated by dividing
net income (loss) by the weighted  average  number of common shares  outstanding
for the period. Diluted earnings (loss) per share are calculated by dividing net
income  (loss) by the  weighted  average  number of common  shares and  dilutive
common stock equivalents outstanding. During the periods presented, common stock
equivalents were not considered, as their effect would be anti-dilutive.

(3)  Reclassifications

Certain  amounts  from the  three  and nine  months  ended  September  30,  2000
financial  statements  have been  reclassified  to conform to the current period
presentation.

                                        4
<PAGE>


Item 2. Management's Discussion and Analysis or Plan of Operation.

Introduction

     The  following  discussion  and  analysis  covers  material  changes in the
financial condition of FTS Apparel,  Inc. (the "Company" or "us") since year end
December 31, 2000 and a comparison  of the results of  operations  for the three
and nine  months  ended  September  30,  2001 to the same  period in 2000.  This
discussion and analysis should be read in conjunction with the audited financial
statements  and  "Management's  Discussion  and  Analysis or Plan of  Operation"
included in the Company's Form 10-KSB for the year ended December 31, 2000.

Results of Operations

     Our operating results declined  significantly from the three and nine-month
periods ended  September 30, 2000 compared to the same periods in 2001.  For the
nine months ended  September  30, 2001,  we realized a net loss of $997,743,  or
$.11 per  share,  on total  revenue  of  $508,014.  This  compares  to a loss of
$925,672,  or $.15 per share, on total revenue of $1,251,500 for the nine months
ended  September  30, 2000.  For the three months ended  September  30, 2001, we
realized  a net  loss of  $288,844,  or $.03 per  share,  on  total  revenue  of
$172,409,  compared  to a net  loss of  $158,049,  or $.02 per  share,  on total
revenue of $1,089,311 for the third quarter of 2000.

     Net  Loss.   Our  net  loss  for  the  third  quarter  or  2001   increased
substantially  from the third quarter of 2000, while the loss for the first nine
months of 2001 remained  substantially  unchanged from the comparable  period of
2000.  The net loss of  $288,844  for the third  quarter of 2001  represents  an
increase of 83% from the loss for the third  quarter of 2000.  This results from
the  substantially  smaller  gross  profit that we reported for the recent third
quarter.  Our gross profit  margins for the three and nine month  periods  ended
September  30, 2001 were 16% and 9%,  respectively,  compared to 29% and 30% for
the same periods in 2000.

     Revenue.  Our revenue has decreased  significantly  during  2001compared to
2000.  Revenue  for the  first  nine  months  of 2001  decreased  59%  from  the
comparable  period of 2000,  while revenue for the first three months  decreased
84% from the comparable  period of 2000. This results primarily from our failure
to repeat a large sale to a major  national  retailer  during  this year that we
completed  during  2000.  That sale was  recorded in the third  quarter of 2000,
resulting in the substantial  decrease in revenue for the third quarter of 2001.
We believe that our inability to repeat that sale or replace it with other sales
is  attributable  to, among other  things,  (i) the intense  competition  in the
apparel  industry and demands placed on retailers to select the most  attractive
merchandise for their stores; and (ii) the disappointing results of sales of our
merchandise at the major retailer during 2000.

     Based on existing orders for merchandise and marketing  efforts to date, we
do not expect that sales in the fourth quarter will be significantly larger than
the third quarter of 2001, if at all.

                                        5
<PAGE>


     We have  implemented two steps in an effort to address the problems created
by our insufficient  revenue:  cost cutting measures and efforts to combine with
other apparel  companies.  Based upon our limited  revenue,  we believe that our
attractiveness  as  an  acquisition  candidate  is  limited.  Further,  we  have
extremely  limited capital to acquire other  companies  ourselves.  However,  we
believe we enjoy some distinction due to our status as a publicly traded company
and the  experience  and expertise of our  management,  and  accordingly  may be
successful in finding one or more entities  willing to explore a merger or other
combination  with  us.  As of the  date  of  filing  this  report,  no  specific
transactions are considered likely.

     Earlier this year,  we  implemented  cost cutting  measures in an effort to
reduce our operating loss and conserve working capital.  These measures included
a reduction  of  personnel,  marketing  budgets and  operating  expenses.  These
measures were continued during the third quarter.  As a result,  we now have one
full-time  staff  member,  and retain the  remainder of our staff on a part-time
basis.  We hope such  measures  are  temporary  and can be  rescinded  if we are
successful in increasing revenue,  obtain additional working capital or complete
a merger or other acquisition.

     Cost of Goods Sold. We believe our cost of goods sold  continues to be high
relative to our sales. This results from several factors,  including high design
costs  relative  to our  production  runs,  efforts  to  maintain  high  quality
merchandise and lack of substantial  purchasing power for our raw materials.  We
hope to address  some or all of these  problems if our revenue  increases in the
future. We also hope our acquisition  strategy outlined above will contribute to
alleviate this problem.

     General and Administrative  Expenses. Our efforts to cut costs and conserve
working  capital have been  successful  in reducing  general and  administrative
expenses a total of  $362,024,  or 28%,  during  the first  nine  months of 2001
compared to 2000.  Substantial  reductions were realized in the following areas:
public relations,  which decreased approximately $198,000  and legal fees, which
decreased  approximately  $39,000.  All of these  savings were the result of our
efforts  to  reduce  our  overhead  while  we  endeavor  to build  our  revenue.
None-the-less, our general and administrative expenses remained high, especially
in view of the  consulting  fees which we paid in stock in the  beginning of the
year and which are being expensed over the life of the agreement.

     Other  Income   (Expense).   Other   (non-operating)   expenses   increased
substantially  during the first nine months of 2001 compared to 2000,  primarily
as a result of the  write-down  of some  inventory  that we acquired in 1999 and
2000.  That item  resulted in other  expenses of $109,180  during the first nine
months of 2001,  compared  to other  expenses  of $3,742  during  the first nine
months of 2000, an increase of $105,438.  This increase  offset a portion of the
savings that we realized in our general and administrative expenses and resulted
in a higher net loss for the period than otherwise would have been the case.

                                        6
<PAGE>


Liquidity and Capital Resources

     Our liquidity and capital position remained quite critical at September 30,
2001.  While we reported working capital of $187,922 at that date, a substantial
portion of our current  assets was comprised of prepaid  expenses that cannot be
used to satisfy  certain of our immediate  liquidity  needs.  Working capital at
September  30, 2001  decreased  $746,072 from fiscal year end December 31, 2000,
substantially  all of which  resulted  from a decrease  in current  assets.  Our
current  liabilities  increased  slightly  from fiscal year end. Our  management
believes  that we may be forced to  discontinue  operations  if we are unable to
obtain additional  capital from outside sources or generate cash from operations
in the immediate future.

     Our cash and accounts  receivable  at September  30, 2001 were reduced to a
total of $91,445. That represents approximately four months of operating capital
for our company, assuming that all of the receivables are collected. Such amount
would be further reduced if we paid off our current liabilities immediately.  To
address  this  deficiency,  we have  implemented  measures  to reduce  costs and
combine with another entity, outlined above. We also hope to liquidate a portion
of our remaining inventory in an effort to generate additional cash.

     During the nine months ended  September  30, 2001,  our  operations  used a
total of $309,855 in cash,  compared to $1,324,631  during the first nine months
of 2000.  However,  our  liquidity  in 2000 was assisted by a  substantial  cash
infusion of $1 million from a private placement. During 2001, on the other hand,
our  financing  activities  resulted  in a further  use of cash.  Overall,  cash
decreased $314,206 from year-end December 31, 2000 to September 30, 2001.

Cautionary Note Regarding Forward-Looking Statements

     This Report (including any documents  incorporated herein by reference) and
other  oral  statements  subsequently  made by or on behalf of the  Company  may
contain   "forward-looking   statements"  within  the  meaning  of  the  Federal
securities laws. Such  forward-looking  statements include,  without limitation,
statements  regarding the Company's plans for working capital,  future revenues,
proposed  acquisitions  and plan of operation and are often  identified by words
such as "anticipates,"  "plans," "expects" and "estimates." A variety of factors
could  cause the  Company's  actual  results  to differ  materially  from  those
contemplated by these forward-looking statements, including, without limitation,
the Special Factors discussed in the Form 10-KSB and those discussed below. Most
of these factors are beyond the control of the Company.  Investors are cautioned
not to put undue  reliance on  forward-looking  statements.  The Company  hereby
disclaims  any intent or  obligation to update  publicly  these  forward-looking
statements.

     Investors should be aware of the following special factors in reviewing the
foregoing information:

                                        7
<PAGE>


     There is no assurance that we can continue as a going  concern,  and may be
forced to liquidate our assets.  Our working  capital and liquidity at September
30, 2001 was perilously  low. Unless we are able to  substantially  increase our
sales or find a business  combination  with a third  party,  we may be forced to
further reduce or curtail  operations.  If we cannot obtain  additional  working
capital,  we may be forced to liquidate our assets. In that event, the creditors
of the Company would be paid first,  and any remaining  proceeds  distributed to
the shareholders. Preferred shareholders will be paid first. If we are unable to
continue our reporting  obligations with the Securities and Exchange Commission,
our stock would be  delisted  from  trading and the market for our common  stock
would be further reduced.

                                       8
<PAGE>

                                   SIGNATURES


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Company has caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                 FTS APPAREL, INC.



Date:  November 13, 2001         By: /s/ Roger K. Burnett
                                     ------------------------------------
                                     Roger K. Burnett, President
                                     (authorized signatory and Principal
                                     Financial Officer)

                                        9