UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)

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

         For the quarterly period ended:    September 30, 2001
                                            ------------------

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

         For the transition period from ________________ to _______________

Commission File No.     33-55254-31
                    ---------------

                                  UNIDYN, CORP.
        (Exact name of Small Business Issuer as specified in its charter)

         NEVADA                                     87-0438639
--------------------------------           -----------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification
incorporation or organization)              Number)

         3640 East Roeser Road
         Phoenix, Arizona                                     85040
--------------------------------------------         ---------------------------
(Address of principal executive offices)             (former Zip Code)


Issuer's telephone number, including area code:               (909) 549-8521
                                                              ------------------

     Indicate  by check  mark  whether  the  Issuer  (1) has filed  all  reports
required to be filed by Section  13or 15(d) of the  Securities  Exchange  Act of
1934 during the preceding 12 months (or for such shorter  period that the Issuer
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. [X] Yes [ ] No

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

                  Class                     Outstanding as of September 30, 2001
------------------------------------        ------------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK                   36,382,546  SHARES



                                        1

<PAGE>



                          PART 1. FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

BASIS OF PRESENTATION

General

The accompanying unaudited financial statements have been prepared in accordance
with  the  instructions  to Form  10-QSB  and,  therefore,  do not  include  all
information  and footnotes  necessary for a complete  presentation  of financial
position,  results  of  operations,  cash  flows,  and  stockholders'  equity in
conformity  with generally  accepted  accounting  principles.  In the opinion of
management,  all adjustments considered necessary for a fair presentation of the
results of  operations  and  financial  position have been included and all such
adjustments are of a normal  recurring  nature.  Operating  results for the nine
months ended  September 30, 2001 are not  necessarily  indicative of the results
that can be expected for the year ending December 31, 2001.


                                        2

<PAGE>



                         UNIDYN, CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                September 30,              December 31,
                                                                                    2001                       2000
                                                                           ----------------------    ----------------------
ASSETS                                                                           (Unaudited)                 (Audited)
   CURRENT ASSETS
<S>                                                                        <C>                       <C>
     Cash in bank                                                          $               79,346    $              222,074
     Accounts receivable                                                                  250,378                   568,670
     Deferred tax benefit                                                                       0                    14,500
     Prepaid expense                                                                       13,572                    11,850
     Receivable - employees                                                                10,000                    15,500
     Inventory                                                                          1,218,383                   895,217
     Deferred interest expense                                                             42,875                    18,000
                                                                           ----------------------    ----------------------

                                                     TOTAL CURRENT ASSETS               1,614,554                 1,745,811

PROPERTY, PLANT & EQUIPMENT                                                               575,200                   620,250

OTHER ASSETS
     Sterling Patent                                                                       37,862                         0
     Deposits and other                                                                         0                    98,971
     Goodwill                                                                           1,132,464                 1,181,702
     Deferred tax benefit                                                                 196,000                   181,500
     Derritron Technology                                                               3,867,364                 3,919,324
                                                                           ----------------------    ----------------------
                                                                                        5,233,690                 5,381,497
                                                                           ----------------------    ----------------------

                                                                           $            7,423,444    $            7,747,558
                                                                           ======================    ======================

LIABILITIES & EQUITY
   CURRENT LIABILITIES
     Accounts payable                                                      $              134,187    $               89,997
     Accrued expenses                                                                     150,205                    64,973
     Loans payable current portion                                                              0                     5,633
     Deposits                                                                                   0                    21,561
                                                                           ----------------------    ----------------------

                                                TOTAL CURRENT LIABILITIES                 284,392                   182,164

   LONG-TERM LIABILITIES
     Long-term debt                                                                     1,292,000                 1,047,300
                                                                           ----------------------    ----------------------

                                                        TOTAL LIABILITIES               1,576,392                 1,229,464

   STOCKHOLDERS' EQUITY
     Common Stock $.001 par value:
       Authorized - 100,000,000 shares
       Issued and outstanding 36,382,546 shares
         (35,382,546 in 2000)                                                              36,383                    35,383
     Additional paid-in capital                                                         7,536,909                 7,148,409
     Retained earnings (deficit)                                                       (1,719,654)                 (659,112)
     Accumulated other comprehensive loss                                                  (6,586)                   (6,586)
                                                                           ----------------------    ----------------------

                                               TOTAL STOCKHOLDERS' EQUITY               5,847,052                 6,518,094
                                                                           ----------------------    ----------------------

                                                                           $            7,423,444    $            7,747,558
                                                                           ======================    ======================
</TABLE>


                                        3

<PAGE>



                         UNIDYN, CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                            AND COMPREHENSIVE INCOME
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                           Three Months Ended               Nine Months Ended
                                                                              September 30,                   September 30,
                                                                          2001             2000           2001           2000
                                                                     ---------------  -------------  --------------  -------------
<S>                                                                  <C>              <C>            <C>             <C>
Net product sales                                                    $       447,426  $     508,619  $    1,687,783  $   2,030,650
Other sales                                                                        0        900,000               0        900,000
Cost of sales                                                               (206,763)      (226,482)       (673,223)      (945,214)
                                                                     ---------------  -------------  --------------  -------------

                                                      GROSS PROFIT           240,663      1,182,137       1,014,560      1,985,436

General and administrative expenses                                         (529,638)      (864,898)     (2,075,102)    (2,431,846)
                                                                     ---------------  -------------  --------------  -------------

                                                 NET INCOME (LOSS)
                                               BEFORE INCOME TAXES          (288,975)       317,239      (1,060,542)      (446,410)

Income tax expense                                                                 0              0               0              0
                                                                     ---------------  -------------  --------------  -------------

                                                 NET INCOME (LOSS)   $      (288,975) $     317,239  $   (1,060,542) $    (446,410)
                                                                     ================ =============  ==============  ==============

Net income (loss) per weighted average share                         $         (0.01) $        0.01  $        (0.03) $       (0.01)
                                                                     ================ =============  ==============  ==============

Weighted average number of common shares
   used to compute net income (loss) per
   weighted average share                                                 36,382,346  35,307,804         36,005,257     35,093,809
                                                                     ===============  ==========     ==============  =============

</TABLE>

                                        4

<PAGE>



                         UNIDYN, CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                    Nine Months Ended
                                                                                      September 30,
                                                                                2001               2000
                                                                         -----------------   -----------------

OPERATING ACTIVITIES
<S>                                                                      <C>                 <C>
   Net income (loss)                                                     $      (1,060,542)  $        (446,410)
   Adjustments to reconcile net income (loss) to cash
     provided (required) by operating activities:
       Depreciation and amortization                                               206,254             219,193
       Non-cash interest expense                                                    82,252              84,500
       Deferred taxes                                                                    0                   0
       Deferred interest                                                           (24,875)              4,000
   Changes in assets and liabilities:
       Accounts receivable                                                         323,792             (19,119)
       Inventory                                                                  (323,166)           (277,452)
       Prepaid expenses                                                             (1,722)                  0
       Accounts payable                                                             44,190             (92,910)
       Accrued expenses                                                              2,980              10,511
       (Receivable) Payable - related party                                              0             (20,500)
       Deposits                                                                     77,410             (87,529)
                                                                         -----------------   -----------------

                                           NET CASH PROVIDED (REQUIRED)
                                                BY OPERATING ACTIVITIES           (673,427)           (625,716)

INVESTING ACTIVITIES
   Purchase of equipment                                                           (60,006)           (168,479)
   Patent costs                                                                    (37,862)                  0
                                                                         -----------------   -----------------

                                              NET CASH PROVIDED  (USED)
                                                BY INVESTING ACTIVITIES            (97,868)           (168,479)

FINANCING ACTIVITIES
   Sale of common stock                                                            389,500             707,801
   Loan principal payments                                                          (5,633)           (423,713)
   Loan proceeds                                                                   244,700             950,000
   Cash remaining with former subsidiary                                                 0                   0
                                                                         -----------------   -----------------

                                            NET CASH PROVIDED (USED) BY
                                                   FINANCING ACTIVITIES            628,567           1,234,088
                                                                         -----------------   -----------------

                                            INCREASE (DECREASE) IN CASH
                                                   AND CASH EQUIVALENTS           (142,728)            439,893

Cash and cash equivalents at beginning of year                                     222,074             461,239
                                                                         -----------------   -----------------

                                              CASH AND CASH EQUIVALENTS
                                                       AT END OF PERIOD  $          79,346   $         901,132
                                                                         =================   =================

Cash paid for income taxes                                               $               0   $               0
Cash paid for interest                                                                   0                 998

</TABLE>

                                        5

<PAGE>



ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

THE FOLLOWING DISCUSSION INCLUDES FORWARD-LOOKING STATEMENTS WITH RESPECT TO THE
COMPANY'S FUTURE  FINANCIAL  PERFORMANCE.  ACTUAL RESULTS MAY DIFFER  MATERIALLY
FROM THOSE CURRENTLY  ANTICIPATED AND FROM HISTORICAL  RESULTS  DEPENDING UPON A
VARIETY OF FACTORS.  SEE ALSO THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE
YEAR ENDED DECEMBER 31, 2000.

RESULTS OF OPERATIONS

     For the quarter  ended  September  30, 2001  compared to the quarter  ended
September 30, 2000

     For the three months ending September 30, 2001, the Company reported,  on a
consolidated  basis,  sales of $447,150 as compared to sales of $508,619 for the
same  quarter in 2000,  resulting  in a loss of  $288,975  for the three  months
ending September 30, 2001 as compared to a gain of $317,239 for the same quarter
in  2000.   During  the  third  quarter,   the  Company  recorded   revenues  of
approximately  $357,357  and $89,793  from the  shipments,  services and license
agreement sales generated at the Derritron and Avalon  facilities  respectively.
Management anticipates that during the next three month period, the Company will
move toward  customary  production  level costs and  expenses,  while  Derritron
production expands, and the NorthStar production continues.

     While the  Company's  product  lines are not subject to  inherent  seasonal
shifts,  with the  relatively  low level of sales of the  Company's  products to
date,  the Company's  sales have been  sensitive to small shifts in revenues and
production  which have resulted in material monthly  fluctuations.  In addition,
the  Company's  results to date have been  impacted by the  financial  effect of
world events, changes in facilities, modification of operations, introduction of
new product lines and shifts in the existing customer base.

     Cost of Goods Sold - For the three months  ended  September  30, 2001,  the
costs of goods sold were  $206,763  with a gross  profit  margin of  $240,663 on
product  sales of  $447,426 as compared to $226,482 of costs of goods sold and a
$282,137 gross profit margin on product sales of $508,619 for the same period of
2000,  resulting  in gross  profit  margins  for the three  month  period  ended
September  30, 2001 of 54% as compared to a 55% gross margin for the same period
in 2000.

     Management  anticipates that as its production  expands and the product mix
is diversified,  it will achieve a blended gross margin of approximately  40-50%
on its products,  including direct labor and customary  allocated  manufacturing
overhead. However, until the Company has developed an operating history, and the
related  economic  factors  stabilize,  there is significant  uncertainty  about
future gross margins,  particularly  since gross margins are highly dependent on
product prices,  sales volumes,  material costs and allocation of  manufacturing
overhead.

     Selling,  General and  Administrative  Costs - For the three  months  ended
September 30, 2001, selling, general, and administrative costs were $529,638, as
compared to $864,989 in the same period of 2000, a $335,260 decrease.

     For the nine month period  ended  September  30, 2001  compared to the nine
month period ended September 30, 2000.

     For the nine months ending September 30, 2001, the Company  reported,  on a
consolidated  basis,  sales of $1,687,508 as compared to sales of $2,030,650 for
the same nine month period in 2000,  resulting in a loss of  $1,060,542  for the
nine months ending  September 30, 2001 as compared to a loss of $446,410 for the
same nine  month  period in 2000.  The  revenues  were the  result of  continued
revenue generation from the Company's divisional core products. During the first
nine month period,  the Company recorded revenues of approximately  $432,973 and
$1,254,535 from the shipments,  services,  and sales generated at the Avalon and
Derritron facilities  respectively.  Sales revenues decreased significantly from
the first nine month period of 2000, as the result of an overall  decline in the
circuit  board  market.  This  market  decline  curtailed  many  customers  from
expending funds on capital equipment, which are the Company's products.

     Cost of Goods Sold - For the nine months  ended  September  30,  2001,  the
costs of goods sold were  $673,223  with a gross profit  margin of $1,014,560 on
products  sales of $1,687,783 as compared to $945,214 of costs of goods sold and
a $1,085,436  gross profit margin on product  sales of  $2,030,650  for the same
period of 2000,  resulting  in gross  profit  margins for the nine month  period
ended  September  30, 2001 of 60% as compared to a 53% gross margin for the same
period in 2000.  Due to the general  decline and  delaying of capital  equipment
purchasing by the Company's  customers,  gross margins were increased in 2001 as
the Company's customers decided to service and replace equipment parts.  Service
and parts have  significantly  higher  margins than the Company's core equipment
product lines.


                                        6

<PAGE>



     Selling,  General  and  Administrative  Costs - For the nine  months  ended
September 30, 2001, selling,  general, and administrative costs were $2,075,102,
as compared to  $2,431,846 in the same period of 2000.  The $356,74  decrease in
selling, general and administrative expenses, is a direct result of management's
continuing effort to reduce overhead costs.  Management  primarily  accomplished
this through cost reductions in payroll and related costs.

LIQUIDITY AND CAPITAL RESOURCES

     At September 30, 2001, the Company had a total cash availability of $79,346
compared to $222,074 available as of December 31, 2000, a $142,728 decrease.

     The Company intends to continue to seek additional  working capital to meet
its  operating  requirements  and to  provide  further  capital  for  expansion,
acquisition  of  strategic   technologies   and  direct  costs  related  to  the
anticipated expansion of Derritron's product line.

     While the  Company  believes  that  additional  capital  will be needed for
growth plans of the Company,  management  believes that the working  capital now
available  to it,  along with funds  generated  from  operations,  the  possible
disposition of selected  assets,  and the economies  realized from reductions in
the work  force,  will  allow it to meet  capital  requirements  for the next 12
months,  even  if  substantial   additional  working  capital  does  not  become
available.  However,  management also realizes that due to the Company's limited
working capital  reserves,  a continuation or worsening of the current worldwide
economic  downturn would have a material impact on the Company's  future results
and may create a going concern issue for the Company.

FORWARD-LOOKING STATEMENTS

     Safe Harbor statement under the Private Securities Litigation Reform Act of
1995: Except for historical  information contained herein, the matters discussed
in  this  filing  are   forward-looking   statements   that  involve  risks  and
uncertainties,  including but not limited to economic, competitive, governmental
and technological factors affecting the Company's operations,  markets, products
and prices and other factors discussed in the Company's various filings with the
Securities and Exchange Commission.

                            PART 2. OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

         Not applicable.

ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

         Not applicable.

ITEM 3.           DEFAULT UPON SENIOR SECURITIES

         Not applicable.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

ITEM 5.           OTHER INFORMATION

     Brian Young, the Company's former CFO, resigned and left the Company August
30, 2001. John Provazek, the Company's  former CEO,  resigned as CEO November 5,
2001.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K
                  (a)      Exhibits
                           None
                  (b)      Reports on Form 8-K
                           None



                                        7

<PAGE>


                                   SIGNATURES

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

                                    UNIDYN, CORP.



Dated:   November 19, 2001          /s/ Shirley Nakawatase
                                    --------------------------------------------
                                    Shirley Nakawatase, CFO


                                        8