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 March 31, 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>


                                     Part I

Item 1.    Financial Statements

           Balance Sheet as of March 31, 2001 (unaudited)               1

           Statements of Operations for the Three
             Months Ended March 31, 2001 and 2000 (unaudited)           2

           Statements of Cash Flows for the Three Months
             Ended March 31, 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 6.    Exhibits and Reports on Form 8-K                             8

           Signatures                                                   9


                                        i
<PAGE>

                                FTS APPAREL, INC.
                                  BALANCE SHEET
                                 MARCH 31, 2001
                                   (UNAUDITED)

  ASSETS

CURRENT ASSETS
      Cash                                                          $    71,498
      Accounts receivable                                               124,702
      Inventory                                                         205,434
      Prepaid expenses                                                  439,364
                                                                    -----------
                 Total current assets                                   840,998
                                                                    -----------
PROPERTY AND EQUIPMENT, net                                              48,181
                                                                    -----------

OTHER ASSETS
      Deposits                                                           10,533
                                                                    -----------
                                                                    $   899,712
                                                                    ===========


                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts payable                                              $    58,523
      Accrued expenses                                                   29,459
      Deferred income - trade agreements                                    328
                                                                    -----------
                 Total current liabilities                               88,310
                                                                    -----------


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, 8,503,451 shares issued
        and outstanding                                                   8,503
      Additional paid in capital                                      4,254,605
      Accumulated deficit                                            (3,501,706)
                                                                    -----------
                 Total stockholders' equity                             811,402
                                                                    -----------
                                                                    $   899,712
                                                                    ===========

   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      THREE MONTHS
                                                                  ENDED             ENDED
                                                              MARCH 31, 2001    MARCH 31, 2000
                                                              --------------    --------------

 REVENUES
<S>                                                            <C>              <C>
      Sales of merchandise                                     $    118,043     $           58
      Trade agreements                                                3,430             11,230
                                                               -------------    ---------------

                                                                    121,473             11,288
                                                               -------------    ---------------

 COST OF GOODS SOLD                                                  93,915              1,914
                                                               -------------    ---------------

 GROSS PROFIT                                                        27,558              9,374
                                                               -------------    ---------------

 GENERAL AND ADMINISTRATIVE EXPENSES                                365,880            254,924
                                                               -------------    ---------------

 (LOSS) FROM OPERATIONS                                            (338,322)          (245,550)
                                                               -------------    ---------------

OTHER INCOME (EXPENSE)
     Interest income                                                  2,323                 15
     Interest expense                                                  (213)            (2,205)
     Loss on write-down of inventory                                (80,000)                 -
                                                               -------------    ---------------

                                                                    (77,890)            (2,190)
                                                               -------------    ---------------

NET (LOSS)                                                     $   (416,212)    $     (247,740)
                                                               =============    ===============

PER SHARE INFORMATION:
WEIGHTED AVERAGE SHARES OUTSTANDING (BASIC AND DILUTED)           8,503,451          4,042,674
                                                               =============    ===============

NET (LOSS) PER COMMON SHARE (BASIC AND DILUTED)                $      (0.05)    $        (0.06)
                                                               =============    ===============
</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>

                                                              THREE MONTHS           THREE MONTHS
                                                                  ENDED                  ENDED
                                                             MARCH 31, 2001         MARCH 31, 2000
                                                             --------------         --------------

OPERATING ACTIVITIES
<S>                                                            <C>                    <C>
         Net cash flow (used in) operating activities          $(253,354)             $ (13,416)
                                                               ---------              ---------

INVESTING ACTIVITIES
     Acquisition of fixed assets                                  (1,162)                (1,176)
                                                               ---------              ---------
         Net cash (used in) investing activities                  (1,162)                (1,176)
                                                               ---------              ---------

FINANCING ACTIVITIES
     Proceeds from note payable                                        -                 78,393
     Repayment of notes payable                                        -                (64,995)
     Preferred dividends paid                                     (1,411)                     -
                                                               ---------              ---------
         Net cash provided by (used in) financing activities      (1,411)                13,398
                                                               ---------              ---------

         Net (decrease) in cash                                 (255,927)                (1,194)

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

CASH AT END OF PERIOD                                          $  71,498              $   4,493
                                                               =========              =========
</TABLE>


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

                                        3
<PAGE>



                                FTS APPAREL, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 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 is calculated by dividing
net income (loss) by the weighted  average  number of common shares  outstanding
for the period.  Diluted earnings (loss) per share is 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)  Inventory

Inventories are stated at the lower of cost or market using the weighted average
method.

Subsequent  to March 31, 2001,  the Company  entered  into an  agreement  with a
liquidator  to purchase a portion of the  Company's  inventory.  The agreed upon
purchase price is below the cost of the merchandise.  The Company has recorded a
loss on inventory  write-down  of $80,000 to reflect the  purchase  price of the
inventory.

(4)  Equity

During  January 2001,  the Company issued 782,222 shares of common stock related
to consulting services to be provided by the Chief Executive Officer.  The value
of the  consulting  services is  stipulated to be $220,000.  Per the  consulting
agreement, the shares were valued at 75% of the average bid and ask price of the
common stock on December 31, 2000.

                                        4
<PAGE>



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

     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
months  ended  March 31, 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 three  months  ended  March 31,  2001,  we  realized  a net loss of
$416,212, or $.05 per share, on revenue of $121,473. While our revenue increased
976% from the first quarter revenue of 2000, it decreased from the pace which we
established   during  the  entire  2000  fiscal  year,  when  revenue   averaged
approximately  $340,000  per  quarter.  We  hope  to make up some or all of this
shortfall during the balance of the year, as our sales are typically stronger in
the third quarter of the year. Retail sales of apparel are generally stronger in
the third quarter of the year, when purchasers are preparing for  back-to-school
needs and other clothing  requirements.  However,  there is no assurance that we
will be  successful  in that  effort,  especially  in  view of the  fact  that a
substantial  part of our 2000  sales were made to a single  customer  and we are
unsure whether those sales will be repeated in the current year.

     While our revenue during the first quarter of 2001 increased  substantially
from the  comparable  period of 2000, we believe that our sales were  negatively
affected by several factors.  First, retail sales were down industry-wide due to
the state of the U.S.  economy.  Consumers  have  been  spending  less,  causing
retailers to be more conservative in their ordering.  Second,  the first quarter
is generally the least productive for the retail sector,  especially apparel, as
consumers  recover  from  holiday  spending  and save for income  tax  payments.
Finally,  we are still  seeking to establish and expand our niche in the apparel
industry,  where  competition  is  intense.  For all of  these  reasons,  we are
continually  striving to expand our marketing  efforts and run our business more
efficiently.

     As has been  the case  since  our  inception,  our  gross  profit  has been
insufficient to cover general and administrative expenses. Our profit margin for
the first quarter of 2001 was approximately 23%,  consistent with our experience
during all of 2000. However,  that profit margin was substantially less than the
first  quarter of 2000,  when we achieved a margin of 83%.  We believe  that the
first quarter of 2000 was an anomaly, due to a different product mix than we now
offer  and our  more  sophisticated  means  of  tracking  expenses  at  present.
None-the-less,  we expect to  continue  to incur  losses  until such time as our
sales  are  sufficient  to  cover  costs of goods  sold as well as  general  and
administrative expenses.

     In an effort to reduce our overhead,  we have been exploring  opportunities
to reduce our staff and outsource some of our functions. We have had discussions
with one or more entities to transfer some  internal  functions  such as design,
sourcing of materials and shipping.  These items are significant portions of our
costs and  expenses,  and we are trying to be more  efficient in  utilizing  our
resources, especially while we attempt to expand our sales.

     General and  administrative  expenses  for the three months ended March 31,
2001 were $365,880,  an increase of $110,956,  or 44%,from the comparable period
of 2000. While certain expenses such as advertising, consulting and professional

                                        5
<PAGE>

fees  decreased in the first  quarter of 2001  compared to the first  quarter of
2000,  other  expenses such as salaries  increased.  The increase in salaries is
primarily  attributable to the additional  staff which has been hired to support
the  increase  in sales.  We also  incurred  a special  charge  during the first
quarter of 2001  relating to a write-down  of inventory in  connection  with our
efforts to liquidate that merchandise. We do not expect that this charge will be
repeated in the future.

     Management  believes  that the  Company's  products are  continuing to gain
marketplace acceptance.  However, the industry is extremely competitive, and the
Company is a new entrant into that industry.  Management  also believes that the
Company suffers from a small marketing  budget,  compounding the difficulties of
competing  in the apparel  industry.  However,  we remain  optimistic  that with
continued  perseverance and creativity,  we can succeed in gaining new customers
and expanding our sales.

Liquidity and Capital Resources

     Our financial  position  declined during the first quarter of 2001 compared
to our  position  at  December  31,  2000.  Working  capital  at March 31,  2001
decreased $181,306,  or 19%, from year end December 31, 2000. A decrease in cash
of $255,927 made up most of that decrease.  Accounts receivable increased in the
approximate  amount of  $35,000  due to sales  made in the first  quarter of the
year. Inventory decreased  approximately  $83,000, as merchandise stock was sold
to customers and not  replentished.  The Company follows a policy of only adding
to invertory when orders are received in an effort to conserve  working capital.
The other component of working capital, current liabilities, decreased from year
end, as we made payments to vendors and did not incur as many new obligations.

     Despite the decline in working capital in the first quarter,  however,  our
current  ratio  remained  strong at 9.5.  However,  we believe that we are still
dependent upon receipt of capital from outside sources to become  profitable and
continue as a going concern.

     Our operations used $253,354 of cash during the first quarter of 2001. This
cash was spent primarily on payment of general and administrative expenses. Cash
spent on production of merchandise  was relatively  minor, as our sales were not
significant. As discussed above, we are exploring options to outsource a portion
of our staff  functions in an effort to reduce  negative  cash flow and conserve
available working capital.

     Subsequent  to the end of the  quarter,  we entered  into an  agreement  to
liquidate a portion of our  inventory.  While we took a write-down of $80,000 on
that  transaction,  it will  provide  us with  additional  liquidity  to run our
operations in the future.  Based upon the cash and working  capital  existing at
March 31, 2001,  as well as current  commitments,  management  believes that the
Company has sufficient  working capital to meet its cash requirements  until the
end of this year.  However,  the Company will require additional cash in 2002 to
continue its operations.  It is anticipated  that this capital will be sought in
the form of private debt or equity financing.

     During the first  quarter of 2001, we issued  782,222  shares of our common
stock in a non-cash transaction with our Chairman and principal shareholder. The
shares were issued in connection  with a consulting  agreement which required us
to  compensate  the  individual  at the rate of $220,000 for  services  rendered
during the year, which compensation could be paid in cash or common stock at our
option.  Due to our working capital position,  we determined to issue the stock.
Compensation expense in the amount of $220,000 will be expensed over the life of

                                        6
<PAGE>

the contract.  The common stock was issued  pursuant to the  exemption  from the
registration requirements of the Securities Act of 1933 provided by Section 4(2)
thereof,  as the recipient was afforded the information which would be contained
in a registration statement.  The certificate representing the shares was issued
with the restrictive  legend required by Rule 144 of the Act. No underwriter was
involved in the transaction, and no commissions were paid in connection with the
issuance of the shares.

Cautionary Note Regarding Forward-Looking Statements

     In connection  with the safe harbor  provisions  of the Private  Securities
Litigation  Reform  Act of 1995  (the  "Reform  Act"),  the  Company  is  hereby
providing cautionary  statements  identifying important factors that could cause
the  Company's  actual  results to differ  materially  from those  projected  in
forward-looking  statements  (as such term is defined in the Reform Act) made by
or on behalf of the  Company  herein or  orally,  whether in  presentations,  in
response to questions or otherwise.  Factors that could cause actual  results to
differ materially include, among others set forth in the Company's Annual Report
on Form 10-KSB,  the following:  acceptability of the Company's  products in the
retail market place, general economic conditions,  receipt of sufficient working
capital and the overall  state of the retail  clothing  industry.  Most of these
factors are outside the control of the Company.  Any statements that express, or
involve discussions as to expectations,  beliefs, plans, objectives, assumptions
or future events or performance (often, but not always, through the use of words
or phrases such as "will  result",  "are  expected  to",  "will  continue",  "is
anticipated",  "estimated", "projection" and "outlook") are not historical facts
and may be forward-looking and, accordingly,  such statements involve estimates,
assumptions,  and  uncertainties  which  could  cause  actual  results to differ
materially from those expressed in the forward-looking statements.

     The  Company   cautions  that  actual  results  or  outcomes  could  differ
materially from those expressed in any forward-looking  statements made by or on
behalf of the Company. Any forward-looking  statement speaks only as of the date
on which such  statement is made,  and the Company  undertakes  no obligation to
update  any  forward-looking  statement  or  statements  to  reflect  events  or
circumstances  after the date on which such  statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and it
is not  possible  for  management  to  predict  all of  such  factors.  Further,
management  cannot  assess the impact of each such factor on the business or the
extent to which any factor, or combination of factors,  may cause actual results
to differ materially from those contained in any forward-looking statements.

                                        7
<PAGE>

                           Part II: Other Information


Item 1:  Legal Proceedings
       None

Item 2:  Changes in Securities

       During the period  covered by this  report, the Company issued a total of
782,222  shares  of its  common  stock  in a  single  transaction  that  was not
registered  under the  Securities  Act of 1933.  Effective  January 5, 2001, the
Company  issued those shares to its  Chairman for  compensation  pursuant to the
terms of  consulting  agreement  between such  individual  and the Company.  The
shares  were issued at a price of  $0.28125  per share,  for a total of $220,000
based upon the trading price of the Company's common stock at December 31, 2000.

       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 which 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.

Item 3:  Defaults Upon Senior Securities
       None

Item 4:  Submission of Matters to a Vote of Security Holders
       None

Item 5:  Other information
       None

Item 6:  Exhibits and Reports on Form 8-K
       A.  Exhibits.
           None.

       B.  Reports on Form 8-K
           The  Company  did not file any  reports on Form 8-K during the
first quarter covered by this report.

                                        8
<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:  May 18, 2001          By: /s/ Roger K. Burnett
                                 -----------------------------
                                 Roger K. Burnett, President
                                 (Principal Financial Officer)

                                        9