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 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 0-24829


                                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 Issuer's classes of common equity as
of May 18, 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
                                                   ---      ---

<PAGE>
                                FTS Apparel, Inc.

                                      Index


                                     Part I

Item 1.    Financial Statements

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

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

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

           Notes to Financial Statements (unaudited)                     4

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



                                     Part II


Item.      Changes in Securities                                         7

           Signatures                                                    8

                                        i
<PAGE>

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

                                     ASSETS

CURRENT ASSETS
      Cash                                                          $    10,884
      Accounts receivable                                               101,420
      Due from employee                                                   6,178
      Inventory                                                          87,810
      Prepaid expenses                                                  332,765
                                                                    -----------

                Total current assets                                    539,057
                                                                    -----------

PROPERTY AND EQUIPMENT, net                                              41,069
                                                                    -----------
OTHER ASSETS
      Deposits                                                            9,282
                                                                    -----------
                                                                    $   589,408
                                                                    ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts payable                                              $    53,891
      Accrued expenses                                                   13,576
      Deferred income - trade agreements                                  3,227
                                                                    -----------

                Total current liabilities                                70,694
                                                                    -----------


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                                            (3,794,394)
                                                                    -----------

                Total stockholders' equity                              518,714
                                                                    -----------

                                                                    $   589,408
                                                                    ===========

   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                   SIX MONTHS ENDED
                                                          -----------------------------     --------------------------------
                                                          JUNE 30, 2001   JUNE 30, 2000     JUNE 30, 2001      JUNE 30, 2000
                                                          -------------   -------------     -------------      -------------

 REVENUES
<S>                                                       <C>             <C>              <C>              <C>
     Sales of merchandise                                 $   212,897      $   132,698      $   330,940      $   132,756
     Trade agreements                                           1,235           14,762            4,665           26,003
                                                          -----------      -----------      -----------      -----------

                                                              214,132          147,460          335,605          158,759
                                                          -----------      -----------      -----------      -----------

 COST OF GOODS SOLD                                           224,222          102,948          318,137          104,862
                                                          -----------      -----------      -----------      -----------

 GROSS PROFIT                                                 (10,090)          44,512           17,468           53,897
                                                          -----------      -----------      -----------      -----------

 GENERAL AND ADMINISTRATIVE EXPENSES                          283,555          567,863          649,435          822,787
                                                          -----------      -----------      -----------      -----------

 (LOSS) FROM OPERATIONS                                      (293,645)        (523,351)        (631,967)        (768,890)
                                                          -----------      -----------      -----------      -----------

OTHER INCOME (EXPENSE)
    Interest income                                               957            4,114            3,280            4,118
    Interest expense                                                -             (646)            (213)          (2,851)
    Loss on write-down of inventory                                 -                -          (80,000)               -
                                                          -----------      -----------      -----------      -----------

                                                                  957            3,468          (76,933)           1,267
                                                          -----------      -----------      -----------      -----------

NET (LOSS)                                                $  (292,688)     $  (519,883)     $  (708,900)     $  (767,623)
                                                          ===========      ===========      ===========      ===========

PER SHARE INFORMATION:
WEIGHTED AVERAGE SHARES OUTSTANDING (BASIC AND DILUTED)     8,598,451        6,575,651        8,550,951        4,963,623
                                                          ===========      ===========      ===========      ===========

NET (LOSS) PER COMMON SHARE (BASIC AND DILUTED)           $     (0.03)     $     (0.08)     $     (0.08)     $     (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>



                                                             SIX MONTHS ENDED     SIX MONTHS ENDED
                                                              JUNE 30, 2001        JUNE 30, 2000
                                                             ----------------     ----------------

OPERATING ACTIVITIES
<S>                                                            <C>                  <C>
         Net cash flow (used in) operating activities          $  (312,190)         $  (344,265)
                                                               -----------          -----------

INVESTING ACTIVITIES
     Acquisition of fixed assets                                    (2,940)             (32,560)
                                                               -----------          -----------
         Net cash (used in) investing activities                    (2,940)             (32,560)
                                                               -----------          -----------

FINANCING ACTIVITIES
     Common stock issued, net of offering costs                          -            1,000,000
     Proceeds from note payable                                          -               78,393
     Repayment of notes payable                                          -              (64,995)
     Payment of preferred dividends                                 (1,411)                   -
                                                               -----------          -----------
         Net cash provided by (used in) financing activities        (1,411)           1,013,398
                                                               -----------          -----------

         Net increase (decrease) in cash                          (316,541)             636,573

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

CASH AT END OF PERIOD                                          $    10,884          $   642,260
                                                               ===========          ===========
</TABLE>


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

                                        3
<PAGE>

                                FTS APPAREL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 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 six months  ended June 30,  2000  financial
statements have been reclassified to conform to current periods 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 six months ended June 30, 2001 to the same period in 2000.  This  discussion
and analysis  should be read in conjunction  with  "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

     For the six months ended June 30, 2001, we realized a net loss of $708,900,
or $.08 per share,  on $335,605  of total  revenue.  This  compares to a loss of
$767,623,  or $.15 per share,  on total  revenue of $158,759  for the six months
ended June 30, 2000. For the three months ended June 30, 2001, we realized a net
loss of $292,688, or $.03 per share, on total revenue of $214,132, compared to a
net loss of $519,883,  or $.08 per share,  on total  revenue of $147,460 for the
first quarter of 2000.  Revenue for the first six months of 2001  increased 111%
over the  comparable  period of 2000,  while  revenue for the first three months
increased 50% over the comparable period of 2000.

     Net Loss.  Although  our revenue more than doubled for the first six months
of 2001  compared  to the  comparable  period  of 2000,  our net  loss  remained
substantially  the same.  This results  from two  factors:  (i) our gross profit
decreased by  approximately  $36,000 from 2000 to 2001,  despite the increase in
revenue during 2001; and (ii) we experienced a loss on the write-down of certain
inventory in the amount of $80,000 during the first six months of 2001.

     While our  revenue has  increased  during the three and  six-month  periods
ended June 30, 2001  compared to the similar  periods of 2000,  the increase has
been  insufficient to generate a profit.  We attribute this situation to several
factors:  (i) most of our sales during the second quarter of this year were made
to an inventory liquidator in an effort to eliminate seasonal merchandise;  (ii)
our  relatively  recent entry into the retail  apparel  industry;  (iii) intense
competition in that industry; (iv) a lack of adequate working capital for design
and  marketing;  and (v)  general  economic  conditions.  Notwithstanding  these
obstacles,   however,  we  still  believe  in  our  business  plan  and  in  the
attractiveness of our merchandise.

     We have recently implemented two steps in an effort to address the problems
created by our  insufficient  revenue:  cost  cutting  measures  and  efforts to
acquire other apparel companies. In an effort to generate additional revenue and
take  advantage  of  perceived  efficiencies  in  operating  and  administrative
expenses,  we have recently  investigated  the  acquisition  of other  companies
operating  in the  apparel  industry.  Toward  that end, we executed a letter of
intent in June to acquire another apparel company. However, our efforts to reach
agreement  with the  proposed  sellers  on  certain  terms and  conditions  were
unsuccessful,  and negotiations  were terminated.  However,  we believe that our
acquisition strategy,  if successful,  will result in improved operations in the
future. We continue to explore  opportunities for other  acquisitions,  although
such efforts will depend on our ability to raise additional capital and identify
attractive candidates which are available on terms acceptable to us.

                                        5
<PAGE>

     Also during June,  we  implemented  cost  cutting  measures in an effort to
reduce our operating loss and conserve working  capital.  These measures include
the reduction of personnel,  marketing budgets and operating  expenses.  We hope
such measures are temporary and can be rescinded once we reach  profitability or
obtain additional working capital.

     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. 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  $173,352,  or 21%,  during  the first  six  months of 2001
compared to 2000.  Substantial  reductions were realized in the following areas:
public  relations,   which  decreased  approximately  $40,660,  salaries,  which
decreased approximately $40,000,  travel, which decreased approximately $24,000,
legal  fees,  which  decreased  $24,123  and design  expenses,  which  decreased
approximately  $5600.  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 six months of 2001 compared to 2000, primarily as
a result of the write-down of some inventory which we acquired in 1999 and 2000.
That item  resulted in other  expenses of $76,933,  compared to other  income of
$1,267 during the first six months of 2000, a decrease of $78,200. This offset a
portion of the  savings  that we  realized  in our  general  and  administrative
expenses  and  resulted in a higher net loss for the year than  otherwise  would
have been the case.

Liquidity and Capital Resources

     Our  liquidity  position  was quite  critical  at June 30,  2001.  While we
reported  working  capital of  $468,363,  a  substantial  portion of our current
assets was  comprised  of prepaid  expenses  that  cannot be used to satisfy our
immediate  liquidity needs.  Working capital decreased $465,631 from fiscal year
end December 31, 2000, all of which resulted from a decrease in current  assets.
Our  current  liabilities  were  reduced  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 June 30, 2001 were reduced to a total
of $112,304.  That represents  approximately six months of operating capital for
our  company.  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, outlined above.

     Our intense  marketing  efforts,  if  successful,  may help  alleviate  the
liquidity problem. If we are successful in obtaining one or more purchase orders
for  our  merchandise,  we  believe  commercial  lenders  may  provide  us  with
additional  capital to finance inventory  acquisition.  However,  our assets are
insufficient to obtain traditional debt financing without firm purchase orders.

                                        6
<PAGE>

     We also hope to liquidate a portion of our remaining inventory in an effort
to generate additional cash.

     During the six months ended June 30, 2001, our  operations  used a total of
$312,190  in cash,  compared  to  $344,265  during the first six 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 $316,541
from year-end December 31, 2000 to June 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 above. 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.

                           Part II: Other Information

Item 2: Changes in Securities

     During the period  covered by this  report,  the Company  issued a total of
142,500  shares  of its  common  stock  in a  single  transaction  that  was not
registered  under the  Securities  Act of 1933.  Effective  April 12, 2001,  the
Company  issued  those shares to its  Chairman in  connection  with an agreement
executed during 2000, whereby we agreed to register some stock for sale with the
Securities and Exchange  Commission.  The shares were issued at a price of $0.53
per share,  or a total of $75,380,  based upon the average  trading price of the
Company's common stock over the period of the agreement.

     The shares were issued pursuant to the exemption from registration provided
by Section 4(2) of the 1933 Act, as the  recipient was privy to the same type of
information  that would have been included in a registration  statement.  Due to
his financial position and  sophistication,  the individual was able to fend for
himself in the transaction. No underwriter was involved in this transaction, and
the Company did not pay any commissions.

                                        7
<PAGE>

                                   SIGNATURES

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



                                 FTS APPAREL, INC.


Date:  August 9, 2001        By: /s/ Roger K. Burnett
                                 -----------------------------
                                 Roger K. Burnett, President
                                (authorized signatory and
                                 Principal Financial Officer)

                                        8