SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                             ----------------------

                                   FORM 10-QSB

(Mark One)

 +---+    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 | X |    SECURITIES EXCHANGE ACT OF 1934

 +---+

                    FOR THE QUARTER ENDED SEPTEMBER 30, 1999

                                       OR

 +---+
 |   |    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 +---+    THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from ______________ to ________________

                           Commission File No. 0-20190

                   CLASSICS INTERNATIONAL ENTERTAINMENT, INC.
             (Exact name of registrant as specified in its charter)

          DELAWARE                               36-3859518
(State or other jurisdiction of              (I.R.S. Employer
incorporation or organization)               Identification No.)

    919 NORTH  MICHIGAN  AVENUE,  SUITE  3400,  CHICAGO,  IL 60611  (Address  of
principal executive office) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (312) 482-9006

-----------------------------------------------------------------

Check whether the registrant  (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Exchange  Act 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 of registrant's Common Stock, $.001 par value,  outstanding
as of October 29, 1999 was 17,378,916 shares.


<PAGE>

          CLASSICS INTERNATIONAL ENTERTAINMENT, INC. AND SUBSIDIARIES
                                      INDEX

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                  Consolidated Balance Sheet                           2

                  Consolidated Statement of Operations                 3

                  Consolidated Statement of Cash Flows                 4

                  Notes to Consolidated Financial Statements           5

Item 2.  Management's Discussion and Analysis of                       7
                  Financial Condition and Results of Operations

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                             9

Item 5.  Other Information                                             9

Item 6.  Exhibits and Reports on Form 8-K                              9

SIGNATURES                                                             10


<PAGE>
<TABLE>
<CAPTION>
           CLASSICS INTERNATIONAL ENTERTAINMENT, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                                                       SEPTEMBER 30,              DECEMBER
                                                                           1999                     1998
                                                                        (UNAUDITED)
                                                                  ----------------------    --------------------
                                     ASSETS
<S>                                                             <C>                       <C>
CURRENT ASSETS                                                  $                      0  $                    0

OTHER ASSETS                                                                           0                       0
                                                                  ----------------------    --------------------
                                                                $                      0  $                    0
                                                                  ======================    ====================
                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
      Accounts payable                                          $              1,414,511  $            1,414,511
      Dividends payable                                                          611,700                 488,850
      Accrued liabilities                                                        355,085                 333,764
      Stockholder loans and other notes payable                                  201,845                 201,845
                                                                  ----------------------    --------------------
                  TOTAL CURRENT LIABILITIES                                    2,583,141               2,438,970
                                                                  ----------------------    --------------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
      Preferred stock                                           $              2,012,488   $           2,012,488
      Common stock, $.001 par  value, 30,000,000
        shares authorized; 17,378,916 shares issued
        and outstanding                                                           17,379                  17,379
      Additional paid-in capital                                              12,493,490              12,493,490
      Stock subscription receivable                                              (44,500)                (44,500)
      Accumulated deficit                                                    (17,061,998)            (16,917,827)
                                                                  ----------------------    --------------------
                                    TOTAL STOCKHOLDERS' DEFICIT               (2,583,141)             (2,438,970)
                                                                  ======================    ====================
                                                                $                      0  $                    0
                                                                  ======================    ====================

</TABLE>
                                      F-1
                 See notes to consolidated financial statements
<PAGE>
<TABLE>
<CAPTION>
           CLASSICS INTERNATIONAL ENTERTAINMENT, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                           (UNAUDITED)

                                                      QUARTER ENDED SEPTEMBER 30,  NINE MONTHS ENDED SEPTEMBER 30,
                                                          1999           1998          1999          1998
                                                       --------       --------       --------      --------
<S>                                              <C>            <C>             <C>           <C>
Loss from continuing operations .................$            0 $            0  $           0 $           0

Loss from discontinued operations ...............        (7,139)        (4,345)       (21,321)      (38,685)
                                                       --------       --------       --------      --------
Loss before extraordinary gain ..................        (7,139)        (4,345)       (21,321)      (38,685)

Extraordinary gain - cancellation of debt .......             0              0              0       218,515
                                                       --------       --------       --------      --------
Net income (loss) ...............................        (7,139)        (4,345)       (21,321)      179,830

Preferred stock dividends .......................       (40,950)       (40,950)      (122,850)     (122,850)
                                                       --------       --------       --------      --------
Net income (loss) applicable to common stock ....$      (48,089)$      (45,295) $    (144,171)$      56,980
                                                       ========       ========       ========      =========
Basic and Diluted Income (Loss) Per Common Share:

Loss from continuing operations .................$         0.00 $         0.00  $        0.00 $        0.00

Loss from discontinued operations ...............          0.00           0.00           0.00          0.00

Extraordinary gain ..............................          0.00           0.00           0.00          0.01

Preferred stock dividends .......................          0.00           0.00          (0.01)        (0.01)
                                                       --------       --------       --------      --------
Net income (loss) per common share
  - basic and diluted ...........................$         0.00 $         0.00  $       (0.01) $       0.00
                                                       ========       ========       ========      =========
Average common shares outstanding ...............    17,378,916     17,378,916     17,378,916    17,378,916
                                                       ========       ========       ========      =========
</TABLE>
                                      F-2
                 See notes to consolidated financial statements

<PAGE>
           CLASSICS INTERNATIONAL ENTERTAINMENT, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

                                                            NINE MONTHS ENDED
                                                               SEPTEMBER 30,
                                                              1999      1998
                                                            -------   --------
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income (loss) ...............................$   (21,321)$  179,830
       Adjustments to reconcile net income (loss) to net
        cash used in operations:
            Loss from discontinued operations ..........     21,321     38,685
            Extraordinary gain - cancellation of debt ..          0   (218,515)
                                                            -------   --------
NET CASH USED IN OPERATING ACTIVITIES ..................          0          0

CASH FLOWS FROM INVESTING ACTIVITIES: ..................          0          0

CASH FLOWS FROM FINANCING ACTIVITIES: ..................          0          0


NET DECREASE IN CASH ...................................          0          0

CASH AT BEGINNING OF YEAR ..............................          0          0
                                                            -------   --------
CASH AT END OF YEAR ....................................$         0 $        0
                                                            =======   ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
                                                            -------   --------
Cash paid during the year for interest and
  income taxes .........................................$         0 $        0
                                                            =======   ========
                                      F-3
                 See notes to consolidated financial statements

<PAGE>



           CLASSICS INTERNATIONAL ENTERTAINMENT, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               September 30, 1999

                                   (UNAUDITED)

NOTE 1 - ORGANIZATION:

Classics  International  Entertainment,  Inc. (the  "Company") was  incorporated
under the laws of the State of Delaware on November  20,  1992.  The Company had
four  subsidiaries:  Moondog's,  Inc.,  which  on  August  5,  1997,  filed  for
protection under Chapter 7 of the Bankruptcy laws; Dream Factory, Inc., which on
May 2, 1996,  filed for protection under Chapter 7 of the Bankruptcy Laws; First
Classics,  Inc.,  the holder of a license for the  exclusive use of the Classics
Illustrated copyrights,  trade names and other intangibles,  excluding non-print
media rights;  and Classics  Media Group,  Inc.,  the exclusive  licensee of the
Classics Illustrated properties for non-print media purposes. The Dream Factory,
Inc. and Moondog's,  Inc. Bankruptcy cases were brought to closure in September,
1996 and January, 1998, respectively.

NOTE 2 -  BASIS OF PRESENTATION:

The accompanying  unaudited financial  statements reflect all adjustments which,
in the opinion of management, are necessary for a fair presentation of financial
position and the results of operations for the interim periods presented.

The results of operations for any interim period are not necessarily  indicative
of the results attainable for a full fiscal year.

The financial  statements  have been prepared on the basis that the Company will
continue as a going concern.  The ongoing losses and working capital  deficiency
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  Continued  existence is dependent upon the Company's  ability to raise
additional  equity capital or debt  financing,  neither of which can be assured.
The accompanying  financial statements do not include any adjustments that might
be necessary should the Company be unable to continue as a going concern.

These  statements  have been prepared by the Company and are unaudited.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principals have been
omitted. As such, these financial  statements should be read in conjunction with
the audited  financial  statements  and notes thereto  included in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 1998.

                                      F-4
<PAGE>




ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
        OF OPERATIONS:

RESULTS OF OPERATIONS

NINE MONTHS  ENDED  SEPTEMBER  30,  1999 AS  COMPARED  TO THE NINE MONTHS  ENDED
SEPTEMBER 30, 1998.

The Company ceased its operations at the end of 1996.  Hence there are no losses
from continuing operations subsequent to 1996.

LOSS FROM DISCONTINUED OPERATIONS

The loss from  discontinued  operations  was $38,685  for the nine months  ended
September 30, 1998 versus a loss of $21,321 for the nine months ended  September
30, 1999.

EXTRAORDINARY GAIN - CANCELLATION OF DEBT

The extraordinary  gain resulting from the cancellation of debt was $218,515 for
the nine  months  ended  September  30,  1998  compared  to no such gain for the
quarter ended September, 1999.

NET INCOME (LOSS) APPLICABLE TO COMMON STOCK

Net income  applicable  to common  stock was $56,980  for the nine months  ended
September  30, 1998  compared to a loss of  $144,171  for the nine months  ended
September 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

As of December  31,  1998,  the company  had working  capital and total  capital
deficiencies  of  $2,438,970.  As of September 30, 1999, the company had working
capital and total capital deficiencies of $2,583,141.

The ongoing losses and working capital  deficiency raise substantial doubt about
the Company's  ability to continue as a going  concern.  Continued  existence is
dependent upon the Company's  ability to raise additional equity capital or debt
financing, neither of which can be assured.

                                      F-5
<PAGE>



PART II - OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

In July,  1994,  the Company  discharged  for cause,  four officers of its Dream
Factory subsidiary. The officers who were discharged commenced an action against
the  Company  seeking  approximately  $19,000,000  arising  out of  the  alleged
wrongful  termination of their employment.  The Company subsequently settled the
claims of two of these  four  officers  in return  for a payment  obligation  of
$600,000, which represented approximately $2,000,000 of the original claim.

While the Company believes that it has good and sufficient  defenses and counter
claims in the forgoing legal matter,  the Company would be adversely affected to
the extent of the damages recovered should the plaintiffs prevail.  However, the
ultimate outcome of the litigation cannot presently be determined.  Accordingly,
excepting for having previously recorded the $600,000 settlement,  no additional
provision for any liability that may result upon  adjudication  has been made in
the accompanying consolidated financial statements.

ITEM 5: OTHER INFORMATION

Not applicable.

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

(a)      No Exhibits

(b) No reports on Form 8-K were filed  during the quarter  ended  September  30,
1999.


<PAGE>




SIGNATURES

Pursuant to the requirements of Sections 13 or 15 (d) of the Securities Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Dated:   November 4, 1999

CLASSICS INTERNATIONAL ENTERTAINMENT, INC.

BY:\s\Richard S. Berger
      Richard S. Berger
      Sole Director and Principal Accounting Officer