FORM 10-QSB
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

[X]  Quarterly report pursuant to section 13 or 15(d) of the Securities
     Exchange Act of 1934 for the fiscal quarter ended September 30, 2000
[ ]  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   000-29669

                            OnLine Power Supply, Inc.
--------------------------------------------------------------------------------
               (Exact Name of Company as Specified in its Charter)

                     Nevada                                    84-1176494
-----------------------------------------------          -----------------------
         (State or other jurisdiction of                    (I.R.S. Employer
         Incorporation or organization)                    Identification No.)

    6909 S Holly Circle, #200 Englewood, CO                    80112
-----------------------------------------------         ------------------------
   (Address of principal executive offices)                    (Zip Code)

Company's telephone Number:  (303) 741-5641
                             --------------

                                      NONE
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

     Check whether the Company:  (1) has filed all reports  required to be filed
by Section 13 or 15(d) of the  Securities  and  Exchange  Act of 1934 during the
preceding 12 months (or for such shorter period that the Company was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. YES X   NO ____

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

                Class                          Outstanding at October 31, 2000
---------------------------------------      -----------------------------------
   Common stock, $.0001 par value                    21,285,715 Shares



                                        1


<PAGE>



                            OnLine Power Supply, Inc.

                                      Index

PART I.  FINANCIAL INFORMATION

ITEM 1.  Financial Statements

         Condensed Balance Sheet September 30, 2000 & December 31,1999......3-4

         Condensed Statements of Operations - Three and Nine Months

         Ended September 30, 2000 and September 30, 1999......................5

         Consolidated Statement of Shareholders' Equity.....................6-7

         Condensed Statements of Cash Flows -- Nine Months

         Ended September 30, 2000 and September 30, 1999......................8

         Notes to Condensed Financial Statements...........................9-14

ITEM 2.  Management's Discussion and Analysis of

         Financial Condition and Results of Operations....................14-17

PART II. OTHER INFORMATION

ITEM 2.  Changes in Securities and Use of Proceeds...........................17

ITEM 4.  Submission of Matter to a Vote of Shareholders......................17

ITEM 5.  Other Information...................................................17

ITEM 6.  Exhibits and Reports on Form 8-K....................................17

         Signatures..........................................................18


                                        2


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                September 30, December 31,
                                                                   2000           1999
                                                                ------------  ------------
                                                                 (unaudited)

Assets

Current assets
<S>                                                             <C>           <C>
      Cash                                                      $ 2,046,332   $ 1,941,367
      Certificates of deposit                                     2,650,000     3,100,000
      Short term investments                                      4,959,182          --
      Accounts receivable, net of allowance for uncollectible
           accounts totaling $187 (2000) and $364 (1999)             16,891         6,048
      Accrued interest receivable                                   208,432          --
      Receivable from officers                                       40,050          --
      Inventory, at cost                                            186,566        66,713
      Prepaid expenses                                              165,010         2,780
                                                                -----------   -----------
           Total current assets                                  10,272,463     5,116,908

Property and other assets
      Property and equipment, less
           accumulated depreciation of $110,416
           (2000) and $66,135 (1999)                                422,797       251,114
      Equipment under capital leases, less
           accumulated depreciation of $22,453
           (2000) and $3,771 (1999)                                  79,510        74,190
      Goodwill, less accumulated
           amortization of $143,987 (2000) and
           $104,718 (1999)                                          117,807       157,076
      Acquired technology costs, less
           accumulated amortization of $70,070
           (2000) and $50,960 (1999)                                 57,330        76,440
      Patents, less accumulated amortization
           of $ 5,156 (2000) and $492 (1999)                         57,594        25,039
      Other assets                                                    9,378         1,512
                                                                -----------   -----------
           Total property and other assets                          744,416       585,371
                                                                -----------   -----------
Non-Current Assets

      Stock Notes Receivable                                         93,280          --
                                                                -----------   -----------
      Total Non-Current Assets                                       93,280          --
                                                                -----------   -----------
                     Total Assets                               $ 1,110,159   $ 5,702,279
                                                                ===========   ===========
</TABLE>




                 See notes to consolidated financial statements.

                                        3


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>

                                                                 September 30,   December 31,
                                                                     2000            1999
                                                                --------------  --------------
                                                                 (unaudited)

Liabilities and shareholders' equity

Current liabilities
<S>                                                             <C>             <C>
      Accounts payable                                          $    242,874    $    245,772
      Accounts payable, related parties                                 --           101,081
      Line-of-credit                                                    --               731
      Notes payable, current maturity                                 19,474            --
      Capital lease obligations, current maturity                     30,073          20,017
      Accrued interest payable                                        19,063          26,012
      Bonuses payable, related parties                                  --            72,000
      Retirement liability, related parties, current maturity        148,500            --
      Other                                                           15,432         100,772
                                                                ------------    ------------
           Total current liabilities                                 475,416         566,385
                                                                ------------    ------------

Long-term liabilities
      Capital lease obligations, less current maturities              41,824          48,583
      Note payable, less current maturity                             28,326            --
      Officer's retirement liability, less current maturity             --              --
                                                                ------------    ------------
           Total long term liabilities                                70,150          48,583
                                                                ------------    ------------
                     Total liabilities                               545,566         614,968
                                                                ------------    ------------

Liability for common stock subject to rescission,
      0 (2000) and 1,243,151 shares (1999)                              --         1,281,815
                                                                ------------    ------------

Shareholders' equity
      Preferred stock, $.0001 par value; 1,000,000 shares
           authorized  10,467 (1999) and 2,800 (2000)
           shares issued and outstanding                                --                 1
      Common stock; $.0001 par value; 50,000,000 shares
           authorized; 21,285,715 (2000) and 16,954,119(1999)
           shares issued and outstanding                               2,120           1,571
      Additional paid-in capital                                  29,287,886      19,914,828
      Retained (deficits)                                        (18,725,414)    (16,110,904)
                                                                ------------    ------------
           Total shareholders' equity                             10,564,593       3,805,496
                                                                ------------    ------------
Total liabilities and shareholders' equity                      $ 11,110,159    $  5,702,279
                                                                ============    ============
</TABLE>





                 See notes to consolidated financial statements.

                                        4


<PAGE>



                            ONLINE POWER SUPPLY, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                          FOR THE                           For the
                                          QUARTER                           Quarter
                                           ENDED        Year to Date         Ended         Year to Date
                                       SEPTEMBER 30,    September 30,    September 30,    September 30,
                                           2000             2000              1999             1999
                                       --------------   -------------    --------------   -------------

<S>                                    <C>              <C>              <C>              <C>
Net sales                              $     20,848     $     48,959     $     70,389     $    258,978
Cost of sales                                28,634           42,162           52,489          201,737
                                       ------------     ------------     ------------     ------------
Gross profit (Loss)                          (7,786)           6,797           17,900           57,241
                                       ------------     ------------     ------------     ------------

Operating cost and expenses

Research and development                    317,991          894,670          167,671          315,861
Stock Based Compensation                    359,607          363,113             --               --

Selling, general and administrative
      expenses                              443,349        1,724,815          230,324          641,157
                                       ------------     ------------     ------------     ------------

Total costs and expenses                  1,120,947        2,982,598          397,995          957,018
                                       ------------     ------------     ------------     ------------

           Loss from operations          (1,128,733)      (2,975,801)        (380,095)        (899,777)

Interest income                             165,913          391,460            1,110            1,110
Interest (expense)                           (6,343)         (29,960)         (11,621)         (41,421)

Net Other income                            159,570          361,499          (10,511)         (40,311)
Net (loss) Before Income Tax               (969,163)      (2,614,302)        (390,606)        (940,088)
Income Taxes                                   --               --               --               --
                                       ============     ============     ============     ============

Net (loss) After Income Tax                (969,163)      (2,614,302)        (390,606)        (940,088)
Net (loss) available to common
      shareholders                     $   (969,163)    $ (2,614,302)    $   (390,606)    $   (940,088)

Net loss per common share              $       (.05)    $       (.14)    $       (.03)    $       (.05)
                                       ============     ============     ============     ============

Weighted average shares outstanding      19,808,175       18,404,254       12,178,486       12,168,109

</TABLE>



                                            See notes to consolidated  financial
statements.

                                                                       5


<PAGE>


<TABLE>
<CAPTION>

                              CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                               JANUARY 1, 1999 THROUGH SEPTEMBER 30, 2000 (UNAUDITED)


                                                                Preferred Stock       Preferred Stock          Preferred Stock
                                                                ---------------       ---------------          ---------------
                                                                          Par                    Stated                   Stated
                                                                Shares   Value       Shares       Value       Shares       Value
                                                                ------  -------      ------     ---------     ------     ---------

<S>                                                             <C>     <C>          <C>        <C>           <C>        <C>
Balance, January 1, 1999                                        12,467  $     1      125,000    $ 250,000        --      $    --

Cumulative preferred stock issued in private placement
  (Note 12)                                                      --          --       25,600       51,200     272,750      545,501

Common stock issued for services (Note 7)                        --          --         --           --          --           --

Common stock issued for sales commissions (Note 7)               --          --         --           --          --           --

Conversion of non-cumulative preferred stock to common stock
  (Note 6)                                                      (2,000)      --     (125,000)    (250,000)       --           --

Common stock issued for retirement of debt (Note 6)              --          --         --           --          --           --

Common stock issued in private placement (Note 12)               --          --         --           --          --           --

Stock offering costs                                             --          --         --           --          --           --

Stock subject to rescission (Note 5)                             --          --         --           --          --           --

Conversion of cumulative preferred stock to common stock
  (Note 6)                                                       --          --      (33,460)     (66,920)   (299,324)    (598,649)

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

Balance, January 1, 2000                                        10,467  $     1         --      $     --         --      $    --
                                                                ======  =======     =========   ==========   =========   ==========
</TABLE>






                                See notes to consolidated financial statements.


                                                    6a


<PAGE>



<TABLE>
<CAPTION>

                              CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                               JANUARY 1, 1999 THROUGH SEPTEMBER 30, 2000 (UNAUDITED)


                                                                   Common Stock
                                                                   ------------          Additional                      Total
                                                                              Par         Paid in        Retiained    Shareholders'
                                                                Shares        Value       Capital         Deficit        Equity
                                                                ------       ---------  -------------     -------        -------

<S>                                                            <C>           <C>        <C>            <C>            <C>
Balance, January 1, 1999                                       11,846,826    $ 1,185    $  8,879,706   $(9,573,142)   $   (442,250)

Cumulative preferred stock issued in private placement
  (Note 12)                                                         --         --            --                --          596,701

Common stock issued for services (Note 7)                          25,000          2          62,835           --           62,837

Common stock issued for sales commissions (Note 7)                336,350         34         252,229           --          252,263

Conversion of non-cumulative preferred stock to common
  stock (Note 6)                                                  254,000         25         249,975           --            --

Common stock issued for retirement of debt (Note 6)                53,571          5         149,995           --          150,000

Common stock issued in private placement (Note 12)              3,222,104        322       6,443,891           --        6,444,213

Stock offering costs                                                --         --           (959,699)          --         (959,699)

Stock subject to rescission (Note 5)                           (1,243,151)      (124)     (1,281,691)          --       (1,281,815)

Conversion of cumulative preferred stock to common stock
  (Note 6)                                                      1,216,268        122       6,117,587           --        5,452,140

Net (loss) for the year ended December 31, 1999                     --         --            --          (6,537,762)    (6,537,762)
                                                               ----------    -------    ------------   -------------  ------------

Balance, January 1, 2000                                       15,710,968    $ 1,571    $ 19,914,828   $(16,110,904)  $  3,805,496
                                                               ==========    =======    ============   ============   ============
</TABLE>






                               See notes to consolidated  financial statements.


                                                    6b


<PAGE>


<TABLE>
<CAPTION>

                               CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                                JANUARY 1, 1999 THROUGH SEPTEMBER 30, 2000 (UNAUDITED)

                                                   (CONTINUED)


                                                                  Preferred Stock     Preferred Stock       Preferred Stock
                                                                  ---------------     ---------------      ----------------
                                                                            Par               Stated                  Stated
                                                                 Shares    Value    Shares    Value        Shares     Value
                                                                 ------   -------   ------  ----------     ------     ------

<S>                                                              <C>      <C>     <C>       <C>          <C>        <C>
 Balance, January 1, 2000                                        10,467   $    1      --    $      --         --    $      --

 Conversion of non-cumulative preferred stock to
   common stock                                                  (7,667)      (1)     --           --         --           --

 Stock offering costs (36,624 shares issued at
   $2 per share included)                                           --        --      --           --         --           --

 Common stock issued in private placements                          --        --      --           --         --           --

 Reverse rescission liability                                       --        --      --           --         --           --

 Stock exchanged for public relations fees                          --        --      --           --         --           --

 Stock exchanged for consulting services                            --        --      --           --         --           --

 Warrants granted for investor relations services                   --        --      --           --         --           --

 Stock issued in exercise of options                                --        --      --           --         --           --

 Options granted (directors)                                        --        --      --           --         --           --

 Net loss for the Nine Months Ended September 30, 2000              --        --      --           --         --           --
                                                                --------  ------- -------   ----------   --------   ----------
 Balance, September 30, 2000                                      2,800   $   --      --    $      --         --    $      --
                                                                ========  ======= =======   ==========   ========   ==========
</TABLE>




                            See notes to consolidated financial statements.


                                                    7a


<PAGE>


<TABLE>
<CAPTION>

                              CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
                               JANUARY 1, 1999 THROUGH SEPTEMBER 30, 2000 (UNAUDITED)

                                                  (CONTINUED)


                                                                Common Stock
                                                               --------------                                             Total
                                                                            Par       Additional         Retained      Shareholders'
                                                              Shares       Value    Paid in Capital      Deficit         Equity
                                                              ------      -------   ---------------      -------         -------

<S>               <C>                                       <C>           <C>       <C>              <C>              <C>
 Balance, January 1, 2000                                   15,710,968    $ 1,571   $  19,914,828    $ (16,110,904)   $  3,805,496

 Conversion of non-cumulative preferred stock to
   common stock                                                 15,334          1              --              --             --

 Stock offering costs (36,624 shares issued at
   $2 per share included)                                       36,624          4        (960,079)             --         (960,075)

 Common stock issued in private placements                   4,148,216        412       8,311,274              --        8,311,686

 Reverse rescission liability                                1,243,151        124       1,281,691              --        1,281,815

 Stock exchanged for public relations fees                      18,124          1          82,099              --           82,100

 Stock exchanged for consulting services                           --         --            2,835              --            2,835

 Warrants granted for investor relations services                  --           3         135,062              --          135,062

 Stock issued in exercise of options                           113,298          4         456,393              --          456,393

 Options granted (directors)                                       --         --           63,783              --           63,783

 Net loss for the Nine Months Ended September 30, 2000             --         --               -        (2,614,302)     (2,614,302)
                                                            ----------    -------   -------------   ---------------   ------------
 Balance, September 30, 2000                                21,285,715    $ 2,120   $  29,287,886   $  (18,725,414)   $ 10,564,593
                                                            ==========    =======   =============   ==============    ============
</TABLE>




                            See notes to consolidated financial statements.


                                                    7


<PAGE>



                            ONLINE POWER SUPPLY, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                 For the Nine Months Ended
                                                                       September 30,
                                                               -----------------------------
                                                                   2000             1999
                                                               -------------   -------------
                                                                (unaudited)     (unaudited)

Cash flows from operating activities
<S>                                                            <C>             <C>
   Net (loss)                                                  $(2,614,302)    $  (940,088)
   Adjustments to reconcile net loss to net cash
        used by operating activities
      Depreciation and amortization                                142,124          80,060
      Stock Notes Receivable                                       (93,280)           --
      Stock based compensation                                     363,113            --
      Options issued for services                                   63,783            --
      Common stock issued for services                             219,997            --
      Impairment loss on fixed assets                                7,331             437
        Changes in certain assets and liabilities
           Receivables, inventory, and other current assets       (549,274)        (24,285)
           Accounts payable and other current liabilities         (119,767)         12,495
                                                               -----------     -----------
      Net cash (used in) operating activities                   (2,580,275)        871,381
                                                               -----------     -----------

Cash flows from investing activities
   Cash received from maturity of CD                               450,000            --
   Purchases of equipment                                         (232,080)        (14,441)
   Payments to acquire patent                                      (37,220)        (17,431)
   Proceeds from sale of equipment                                    --               800
   Purchase of short term investments                           (4,959,182)           --
                                                               -----------     -----------
      Net cash (used in) investing activities                   (4,778,482)        (31,071)
                                                               -----------     -----------

Cash flows from financing activities
   Proceeds from sale of stock                                   8,792,417       1,257,213
   Payments for offering costs                                  (1,355,059)           --
   Principal payments on capital leases                            (20,705)         (4,345)
   Payments on line of credit                                         (731)           --
   Proceeds from long term debt                                     47,800          50,000
   Principal debt payment                                             --           (85,694)
                                                               -----------     -----------
      Net cash provided by financing activities                  7,463,722       1,217,174
                                                               -----------     -----------

Net increase in cash                                               104,965         314,722

Cash - beginning of period                                       1,941,367         151,341
                                                               -----------     -----------

Cash - end of period                                           $ 2,046,332     $   466,063
                                                               ===========     ===========
</TABLE>

Supplemental disclosure of cash flow information:

   Cash paid for interest  during the nine months ended  September  30, 2000 and
   1999 was $29,960 and $20,859, respectively.

                 See notes to consolidated financial statements.

                                        8


<PAGE>



                            ONLINE POWER SUPPLY, INC.

                        FOOTNOTES TO FINANCIAL STATEMENTS

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------

Basis of Presentation
---------------------

The  financial  statements  include the  accounts of OnLine Power  Supply,  Inc.
(formerly  OnLine   Entertainment,   Inc.).   Two  wholly  owned   subsidiaries,
GlitchMaster Marketing,  Inc. and OnLine Entertainment,  Inc. (separate domestic
Colorado  corporations)  were liquidated into the parent corporation on December
31, 1999 and the  remaining  assets and  liabilities  are now included  with the
accounts of OnLine Power Supply, Inc. (a Nevada domiciled corporation,  formerly
named OnLine Entertainment, Inc., which changed its name to OnLine Power Supply,
Inc. in December 1999).

Earnings (Loss) Per Common Share
--------------------------------

SFAS 128  "Earnings  per Share"  requires a dual  presentation  of earnings  per
share-basic and diluted. Basic earnings per common share has been computed based
on the weighted  average number of common shares  outstanding.  Diluted earnings
per share reflects the increase in weighted  average  common shares  outstanding
that would result from the assumed  exercise of all  outstanding  stock options.
All  periods  presented  have been  restated  to reflect  the  adoption  of this
standard.  All potentially  dilutive securities have been excluded as they would
be antidilutive.

Nature of Organization
----------------------

The Company,  operating as OnLine Power Supply, Inc., has focused on the ongoing
development of the Company's patent pending new power conversion  technology for
release to large OEM manufacturers.  These original equipment manufacturers will
incorporate  OPS  technology  into the  development  of their own product lines.
Additional  sales of the  products  will be  generated  through  a  distribution
channel  that  covers all of the United  States.  Manufacturing  of the units is
out-sourced on a turnkey basis to a well-established  manufacturer of electronic
devices.

Recently Issued Accounting Pronouncements
-----------------------------------------

In March 2000, FAB  Interpretation  N. 44 "Accounting  for Certain  Transactions
Involving Stock  Compensation"  (FIN 44) was issued and became effective July 1,
2000. This interpretation  clarifies the application of APB Opinion 25 and prior
announcements  for  certain  issues  related  to stock  and  options  issued  to
employees.  As part of the Company's incentive stock options program,  employees
were able to exercise vested options via cashless exercise method. Under FIN 44,
this  cashless  feature  enacts  variable plan  accounting  for those options so
exercised.  The Company must recognize compensation expense on the options equal
to the difference between the exercise price and the market price on the date of
exercise; therefore, the Company recognized $359,607 of stock based compensation
during the quarter  ended  September  30,  2000.  At  September  30,  2000,  all
necessary stock based compensation  expense has been recorded in these financial
statements. Subsequent to September 30, 2000, the options program was amended to
eliminate the cashless exercise method.

                                        9


<PAGE>



NOTE 3 - NOTES PAYABLE & LINE-OF-CREDIT
---------------------------------------

Bank Loan
---------

The Company received a $60,000 installment bank loan during the first quarter of
2000 for equipment and working capital. The note carries an annual interest rate
of 7.3% and matures in January of 2003.

Line-of-Credit
--------------

The Company has a $750,000 revolving bank line-of-credit;  however, the line was
not drawn as of September 30, 2000.  Advances on the line carry an interest rate
of 8%. It is  collateralized  by the  pledging of a  $1,000,000  certificate  of
deposit.

NOTE 4 - OTHER LIABILITIES
--------------------------

As part of their executive employment agreements,  two executive officers earned
performance bonuses equivalent to 50% of their annual 1999 compensation.  One of
these officers left the Company in February 2000. The bonuses  totaling  $72,000
were accrued at the end of 1999 and paid during the first quarter, 2000.

NOTE 5 - RESCISSION OFFER
-------------------------

In the first quarter of 2000,  the Company  voluntarily  offered  certain common
shareholders the right to rescind their purchases that occurred in 1998 and 1999
due to the possible  violation of the registration  exemption  provisions of the
Securities Act of 1933. A total potential rescission liability of $1,281,813 was
included in the December 31, 1999 financial statements. None of the shareholders
accepted  the  rescission  offer and the  response  period has  terminated.  The
liability for the  rescission at September 30, 2000 has been reduced to zero and
the liability reclassified as common stock equity on the balance sheet.

NOTE 6 - SHAREHOLDERS' EQUITY
-----------------------------

Stock Options
-------------

On May 26, 2000,  the Board of  Directors  granted  qualified  options for 3,000
shares of common stock to a new employee.  The options are exercisable at $10.62
per share and were immediately  vested; none of these options has been exercised
at September 30, 2000 and will expire December 2, 2009.

On June 28,  2000,  the Board of  Directors  granted  non-qualified  options for
10,000  shares of common stock to a new Director for serving as a Board  Member.
The options are exercisable at $4.50 a share and were  immediately  vested.  The
fair market value of these options,  $63,783,  is reflected in the September 30,
2000  financial  statements.  None of the options was exercised at September 30,
2000 and expire June 28, 2003.

On August 11, 2000,  the Board of Directors  granted  non-qualified  options for
10,000  shares of common stock to a new Director for serving as a Board  member.
The options are  exercisable at $ 8.375 per share and were  immediately  vested.
None of the options was exercised at September 30, 2000 and expire on August 11,
2003.

On September 1, 2000,  non-qualified  options for 540,000 shares of common stock
were  issued  to four  executive  officers  and one  manager.  The  options  are
exercisable at $8.125 per share with 25% vesting  immediately  and the remainder
vesting over a three-year period.

                                       10


<PAGE>



Qualified Stock Option Plan
---------------------------

The Board of Directors  adopted a new Qualified  Incentive  Stock Option Plan on
December 1, 1999. The purpose for the plan is to have the ability to offer stock
incentives to key employees as a reward for past  performance and to attract the
best  qualified  new  employees  by  offering  them stock  options as a means of
incentive.

Directors Non-Qualified Stock Option Plan
-----------------------------------------

The Board of  Directors  adopted a new  Directors  Non-Qualified  stock  plan in
August 2000,  to offer  options for shares of common stock to new members of the
Board who are not employees of the Company. The plan will be used by the Company
to  attract  the most  qualified  candidates  by issuing  options  for an equity
position that hopefully will lead to long-term  contributions  as members of the
Board.  The plan is also designed to provide existing members the opportunity to
be rewarded with stock options for their continuing services to the Company.

NOTE 7 - STOCK BASED PAYMENTS
-----------------------------

During the current  quarter,  30,000  warrants  exercisable for common stock, at
varying exercise prices above current market prices,  were issued to a financial
services  company as stock based  compensation  for furnishing  public relations
services  over the next twelve  months.  A total of $135,062 for the cost of the
warrants was recorded as investment  relations  expense in the current quarter's
financial statements, based on Black-Scholes calculations.

NOTE 8 - RELATED PARTIES
------------------------

During  1999,  the  Company  paid stock  offering  commissions  of $299,919 to a
broker.  The broker is an affiliated party only by virtue of his relationship to
a member of the Company's Board of Directors. The broker received 10% commission
on equity funds raised pursuant to a selling agreement signed by the Company.

The former Chief  Executive  Officer,  with an  employment  agreement,  left the
Company in the first  quarter of 2000,  and by the terms of the  agreement,  may
continue to receive salary and all other benefits for a period of 18 months from
his  separation  date.  A liability  of $148,500 has been accrued for his future
payments  as of  September  30,  2000.  The  separation  expense of  $244,033 is
included in the first quarter of 2000 and will be a non-recurring expense.

                                       11


<PAGE>



NOTE 9 - INCOME TAXES
---------------------

A  reconciliation  of the US statutory  federal income tax rate to the effective
rate follows:
<TABLE>
<CAPTION>

                                                      September 30,        September 30,
                                                      -------------        -------------
                                                          2000                  1999
                                                          ----                  ----

<S>                                                      <C>                   <C>
U.S. statutory federal rate                              34.00%                34.00%
State income tax rate, net of federal benefit             3.00%                3.00%
Provision for bad debts                                     -                    -
Net operating loss for which no tax benefit
  is currently available                                (37.00%)              (37.00%)
                                                        -------               --------

                                                           --   %              --    %
                                                      ===========           ==========
</TABLE>

Deferred taxes consisted of the following:
<TABLE>
<CAPTION>

                                                 Sept. 30, 2000        Sept. 30, 1999
                                                 --------------        --------------
<S>                                              <C>                   <C>
Deferred tax assets, net operating
           Loss carryforward                     $    --               $     --
Valuation allowance                                   --                     --
                                                 ------------          -------------

Net deferred taxes                               $    --               $     --
                                                 ===========          =============
</TABLE>

The  valuation  allowance  offsets the deferred tax assets for which there is no
assurance of recovery.  The change in the  valuation  allowance  for the periods
ended September 30, 2000 and 1999 totaled $0.00 and $0.00, respectively. The net
operating loss carry-forwards expire through the year 2019.

The valuation  allowance will be evaluated at the end of each year,  considering
positive  and  negative  evidence  about  whether the deferred tax asset will be
realized.  At that time,  the  allowance  will either be increased or decreased;
reduction could result in the complete  elimination of the allowance if positive
evidence  indicates  that the  value of the  deferred  tax  assets  is no longer
impaired and the allowance is no longer required.

NOTE 10 - COMMITMENTS AND CONTINGENCIES
---------------------------------------

The Company  leases  office space under a  non-cancelable  operating  lease that
expires on January 31, 2001.  Future  minimum  annual rental  payments under the
office lease are as follows:

Through January 31, 2001
(termination date)                     $  51,587


As part of the employment agreements,  two individuals shall become fully vested
to receive  options to purchase  500,000  shares  (one  million in total) of the
Company's  common stock upon the Company  achieving  the  following  performance
goals:

                                       12


<PAGE>



1.   If the Company's  consolidated gross revenues exceed $3,000,000 by December
     31, 1999,  the  executives  vest in 35% of the options;  this event did not
     happen and the options did not vest accordingly.

2.   If the Company's  consolidated gross revenues exceed $6,000,000 by December
     31, 2000 the executives vest in an additional 35% of the options;

3.   If the Company's  consolidated gross revenues exceed $9,000,000 by December
     31, 2001, the executives vest in the remaining 30% of the options.

The Chief  Executive  Officer left the Company in the first  quarter of 2000 and
the separation costs associated with his departure totaled $244,033 ($148,500 is
the remaining total of the monthly severance payments.)

The  Company  has  entered  into an  arrangement  with  Saturn  Electronics  and
Engineering  Inc. for the  manufacture  of the initial  power  conversion  units
developed  by the  Company.  Saturn  may,  if asked by the  Company,  internally
finance certain costs normally  associated with the initial  production  ramp-up
process and be  reimbursed  out of the  proceeds of payments for the orders when
received by the Company.

NOTE 11 - LITIGATION AND SETTLEMENTS
------------------------------------

The Company has settled  and  satisfied  various  claims that have arisen in the
normal  course of a prior  business  endeavor that has been  terminated.  One of
those cases (Max Music) was litigated and a Federal Magistrate's ruling given in
favor of the Company.  The ruling is now being reviewed by the Federal  District
Court Judge and the final outcome still is not decided.  Management expects that
any future  adverse  impact on the  financial  position of the  Company  will be
minimal.

NOTE 12 - PRIVATE STOCK OFFERINGS
---------------------------------

The Company conducted three separate private offerings and a rescission offering
prospectus (see below)  relating to other earlier private  offering of shares of
common  stock,  separately  circulated  during 1999 and 2000.  The three private
offerings from mid-1999 to mid-2000 were not rescinded; these offerings were not
registered  pursuant to the Securities Act of 1933, as amended (the "Act"),  nor
under the securities act of any state.  These  securities  were offered under an
exemption  from  registration  requirements  of  the  Act  and  exemptions  from
registration  provided by  applicable  state  securities  laws.  The  securities
dealers were paid a commission up to ten percent of the  subscriptions  accepted
by the Company. Offering commissions were paid through a combination of cash and
the  issuance of  restricted  common  stock.  The Company  filed a  registration
statement  prospectus  with the SEC in early  2000 to refund  $1,281,815  of the
financing  provided by the earlier  financings.  None of the investors  chose to
rescind their investments and none of the money was refunded.

                                       13


<PAGE>



Following is a summary of the offerings undertaken in 1999 and of 2000:
<TABLE>
<CAPTION>

                               Refund Offer            Offering #1 New          Offering #2 New          Offering #3 New
                           Rescission Offering             Funding                  Funding                  Funding
                           -------------------         ---------------          ---------------          ---------------

<S>                           <C>                       <C>                      <C>                       <C>
Date:                         February, 2000            August, 1999             November, 1999            April, 2000

Offering:                        Various                $ 2.00/share              $ 2.00/share            $ 2.00/ share
Minimum:                                                  $ 500,000
Maximum:                       $ 1,281,815               $ 5,000,000              $ 2,500,000              $ 8,500,000


<CAPTION>

Sold in 1999
------------
<S>                                                       <C>                        <C>
Shares                                                    2,473,533                  748,571
Proceeds                                                 $ 4,947,066              $ 1,497,142

Reinstated in 2000
------------------
<S>                              <C>                                                                        <C>
Shares                           1,243,151                                                                  4,076,750
Proceeds                       $ 1,281,815                                                                 $ 8,153,500
</TABLE>

NOTE 13 - OPERATIONS
--------------------

The Company  continues to develop an organization for the further support of the
research  and  development   efforts  and  to  commercialize  the  power  supply
technology  developed by the Company  since 1997.  The Company has raised equity
capital by selling stock to support the Company's business plan and to fund cash
flow. Existing financial resources are adequate to allow the Company to complete
the  products  and release  them to the  marketplace  timely and to complete the
development of the 48-volt line of derivative (follow- along) products.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The  following  discussion  should  be read  in  conjunction  with  the
reviewed quarterly financial  statements filed with this report.  Except for the
historical information contained herein, this report may contain forward looking
statements that involve risks and uncertainties,  including  manufacturing risks
associated with implementing new process technology,  achieving commercial-scale
manufacturing  levels,  achieving consistent yields and quality,  uncertainty of
market  acceptance  and  timing of  market  acceptance,  as well as other  risks
detailed  from time to time in the  Company's  filings with the  Securities  and
Exchange Commission,  including the Company's  registration  statement effective
February 24, 2000 (rescission offer).

GENERAL DISCUSSION OF THE BUSINESS STRATEGY

         The  Company  finalized  the  improved  design  for  the  Power  Factor
Corrected  Front End Module  (PFCFEM) during the third quarter that will lead to
anticipated   fourth  quarter  revenues  from  sales  to  a  few  customers  and
distributors.  Additional  derivative  power  supply  products  are  now  in the
research  and  development  stages and are being  finalized  for  release to the
marketplace  in the year 2001.  The original  patent for the new  technology was
filed in October 1999 and has been updated to include this year's improvements

                                       14


<PAGE>



and is  pending  issuance.  Independent  tests of the power  correction  product
verify  that the unit  should  be more  desirable  (than  existing  competitors'
products)  to  the  design  engineers  in  the  telecommunications,  industrial,
military and computer server markets.  The Company  believes that its equivalent
PFCFEM is lighter,  smaller, more efficient, more reliable and price competitive
when compared to equivalent units applied in a comparable situation.

         The  objective for the balance of the year 2000 is to begin the ramp-up
for full-scale  production of the units for our customers in the fourth quarter.
The focus for the year to date has been the  improvement of the initial  product
to include a) operating at a higher baseplate temperature level, b) operating at
lower incoming AC currents,  c) protection from transient  power surges,  and d)
reducing the size of the form factor. Our engineers have incorporated all of the
above  changes  into the unit and  prototypes  are now in the hands of potential
customers for final evaluation and acceptance.

         A full time effort has been  underway in the third  quarter to complete
the  design  and  development  of  the  manufacturing  line  process  at  Saturn
Electronics  and a limited  number of  evaluation  units have been  shipped to a
customer in the third quarter. Additional orders for product are being processed
to allow the  manufacture  and  delivery of product to other  customers  and the
Company's distribution channels in the fourth quarter.

         The  Company is planning to  introduce  its own 48 volt-500  watt power
supply followed by other products with multiple output  capabilities.  We expect
the  first   wide   scale   use  of  the   products   to  be  in  the   wireless
telecommunications  industry;  known  applications  also  exist in the  computer
industry and the military.  The  Company's  objective is to become the leader in
innovation  for the power  supply  industry and to  revolutionize  the way power
supplies  are  perceived.  The  goal is to have the  power  supply  viewed  as a
strategic  component of the next  generation of power driven products that gives
designers a competitive edge when producing their final products.

         The revised  plan was to have a final  design of the PFCFEM  during the
third  quarter  and to begin  producing  the units at Saturn  during  the fourth
quarter.  The PFCFEM has  undergone  six months of  upgrades  to meet a specific
customer's specifications.  The goal for the third quarter has been accomplished
and management  anticipates  that the goal of production  line deliveries in the
fourth quarter will be achieved. Sales and marketing efforts have produced leads
and  interest in the  technology  for  application  in a variety of  industries.
Orders  from  customers  will be  satisfied  on a first come first  serve  basis
starting in the first quarter of 2001. Initial product will also be in the hands
of our distributors and sales representatives during fourth quarter.  Beyond the
PFCFEM,  the Company will  develop  derivative  proprietary  products to include
single and multi-output power supplies for the AC-DC conversion  applications in
a wide range of industries and will include the overseas markets as well.

         We  cannot  predict  when  revenues  will be  sufficient  to  produce a
positive cash flow or result in net profits.  You should carefully  consider the
following  discussions of our liquidity and capital resources in relationship to
our cost of operations on a go forward basis.

RESULTS OF OPERATIONS - PERIOD ENDED SEPTEMBER 30, 2000 COMPARED TO PERIOD ENDED
SEPTEMBER 30, 2000

         Revenues in the current quarter  consisted  mainly of sales and initial
shipments of the power factor  corrected  front end modules (new  technology) to
customers  for  evaluation  and  testing;  total sales of $20,848  this  quarter
compares to sales of $70,389 of the discontinued  GlitchMaster  products for the
quarter ended

                                       15


<PAGE>



September  30, 1999.  The plan is to focus on  development  and sales of the new
product  lines from this fiscal year  forward.  There will be a small  amount of
continuing  sales of the old circuitry to one significant  customer  through the
next several months until the existing inventory is used up.

         The cost of producing  the initial  units in this quarter  exceeded the
sales prices due to the extraordinary amount of additional work to complete such
a small number of units by our contract manufacturer.  The resulting loss on the
sale of these units was $7,786 and was  expected at these  levels;  the cost per
unit will be  significantly  lower when we begin to produce  the units in larger
quantities and with extended production runs.

         The cost of  research  and  development  for the  current  quarter  was
$317,991 or 190% more than the previous  year's  quarter (in constant  dollars).
The effort to finish the  technology  and  commercialize  our first products has
resulted in spending the additional monies for personnel,  equipment, laboratory
space and  related  support  costs.  The first  product  was  finalized  in this
quarter;  however,  the research and development  effort will remain at or above
these spending levels as we complete the 48-volt line of power supply products.

         The greatest increase in our cost structure is for selling, general and
administrative  expenses which reflects the increase in size of the Company from
quarter  over  quarter and year over year.  The Company  employed  ten people in
third quarter 1999 and twenty people in third quarter 2000;  the space  occupied
more than doubled during the year;  and the testing  equipment in the laboratory
was  upgraded  to   state-of-the-art   levels.   A  major   (non-cash)  cost  of
administrative expense was the stock based compensation charges of $363,113 this
year due to the recent new  accounting  rules for reporting the cost of cashless
exercise of  employee  stock  options  when  exercised.  This cost is a non-cash
expense but  nevertheless  a charge to  earnings  that was not part of the prior
year's cost  structure.  The selling general and  administrative  costs for this
quarter was $443,349 versus $230,234 for the same quarter last year, an increase
of 192% illustrating the growth of the Company and the expanded effort to become
revenue  producing with the new technology.  Significant  costs occurred in this
quarter to put the  public  and  investor  relations  programs  in place for the
future,  including  $135,062 as the stock based cost for the warrants granted to
an investor relations company in exchange for their future services.

         The Company has invested its idle cash resources in institutional money
market interest  bearing  accounts and into A grade  commercial paper at average
yields of 6.75%. The net result is investment  earnings this quarter of $159,570
versus $1,110 for the same quarter last year.

         The Company  continues to have a burn rate (average monthly use of cash
for overhead and  operations) of  approximately  $250,000 per month.  Additional
cash is  budgeted  for  procuring  long  lead-time  components  to  support  the
anticipated  production runs for the fourth quarter and beyond. While we have an
arrangement with our manufacturer,  Saturn Electronics and Engineering, Inc., to
purchase parts  inventory for our  just-in-time  production  line needs, we will
still  purchase  hard to find and very long lead time  parts to insure  adequate
supplies for production  line  requirements.  Therefore,  it is critical to keep
ready cash  available  to meet these needs on a short notice basis as we receive
orders and increase production quantities.

LIQUIDITY AND CAPITAL RESOURCES

         The  Company  had  approximately  $2,000,000  in  liquid  money  market
accounts and $2,500,000 in short-term  certificates  of deposit at September 30,
2000 available to support the immediate  cash needs of the  operation.  The term
investments in  certificates of deposit all mature within the next six months or
less and will be kept totally liquid for general  working  capital as production
commences in volume quantities.  An additional $5,000,000 of cash is invested in
commercial paper and matures in the next six to nine months.

                                       16


<PAGE>



After providing the liquidity for operations (if necessary) as discussed  above,
these  monies may be  re-invested  in  short-term  commercial  paper to earn the
maximum earnings for a minimum amount of risk.

         At the  current  monthly  burn rate for  operations,  the  Company  has
approximately two years (i.e.  through  December,  2002) of operating capital in
the bank and/or  invested in short term  investments.  The  anticipated  revenue
stream  beginning in the fourth quarter 2000 will  partially  offset the cost of
operations and in effect lengthen the period of time for measuring the number of
months and the adequacy of our cash reserves.

         Capital to  purchase  additional  equipment  and  further  protect  our
technology with patent processing,  both domestically and internationally,  will
be supplied  with  current  funds.  The estimate for these needs is $250,000 for
equipment and additional office space in early 2001 and $50,000 for patent work.
The Company does not currently  anticipate a need for additional  debt or equity
capital  at this time for  operations  or  growth  beyond  the  total  amount of
resources on hand.  However,  should  product demand exceed our current level of
expectations  resulting in larger and/or more  concentrated  production runs, we
may need to secure  additional  work in process and inventory  type financing to
support higher cash flows.

                           PART II. OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

         See the Quarterly  Financial  Statement Notes for the discussion of the
issuance of employee stock options and  Director's  options during this quarter.
All exercise of options were covered by a Form S-8 registration  statement filed
with the SEC.  Certain  employees  exercised their options by using the cashless
feature of the  Incentive  Stock  Option Plan  ("ISOP")  and  subsequently  sold
shares; some employees had to exercise their options to prevent losing them when
they left the Company.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS.

         There  was  no  annual  meeting  held  and  no  matters   submitted  to
shareholders for vote.

ITEM 5.  OTHER INFORMATION

         On  September  1, 2000,  we signed a 12 month  contract  with  Pfeiffer
Public Relations,  Inc. ("PPR") to provide investor public relations services to
us.  PPR is paid  base  compensation  of $7,000  per  month and has been  issued
warrants to  purchase  30,000  shares of  restricted  common  stock at $9.50 for
10,000 shares, 10,000 shares at $12.50 and 10,000 shares at $15.50. The warrants
are fully  vested.  The  contract  may be  canceled  by either  party on 30 days
notice.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits.

Exhibit No.            Description                                 Page No.
-----------            -----------                                 --------
27.0                   Financial Data Schedule                          19


(b)      The Company did not file any Form 8-K reports during the quarter  ended
 September 30, 2000.


                                       17


<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, hereunto duly authorized.

                                                   ONLINE POWER SUPPLY INC.
                                                   (Company)



Date:   November 3, 2000               By:          /s/   Kris Budinger
                                                 ----------------------
                                                 KRIS BUDINGER,
                                                 CEO and President

Date:   November 3, 2000               By:          /s/   Richard L.  Millspaugh
                                                 -------------------------------
                                                 RICHARD L. MILLSPAUGH,
                                                 Chief Financial Officer



                                       18