QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS SUBJECT
                     TO THE 1934 ACT REPORTING REQUIREMENTS

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                  For the quarterly period ended June 30, 2004
                  --------------------------------------------

     [ ]  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:  333-106955


                            HERITAGE MANAGEMENT INC.
                            ------------------------
              (Exact name of small business issuer in its charter)


          Nevada                                               75-2877108
-------------------------------                            --------------------
(State or other jurisdiction of                            (IRS Employer
 incorporation or organization)                             Identification No.)



             5031 Gordon Smith, Rowlett, Texas                 75043
            ----------------------------------------          --------
            (Address of principal executive offices)          Zip Code

Issuer's telephone number    972-771-0907
                             ------------

         Check whether the issuer (1) has filed all reports required to be filed
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
preceding  twelve  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.
    ---      ---


         APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
         PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15(d) of the Exchange Act after the  distribution of
securities under a plan confirmed by a court.  Yes ______ No _______

       APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares  outstanding  of each of the issuer's class of common
equity,  as of the last practicable date:  As of August 19, 2004 the Company had
3,875,400 shares of voting Common Stock, $.001 par value issued and outstanding.

     Transitional Small Business Disclosure Format (check one): ________ _______


<PAGE>


<TABLE>

<CAPTION>


                         PART I - FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

                            HERITAGE MANAGEMENT, INC.
                                  BALANCE SHEET
                                  June 30, 2004
                                   (Unaudited)

                                     ASSETS

<S>                                                                            <C>

Current assets:
  Cash                                                                         43,082
  Note receivable                                                              12,608
  Advances                                                                     51,156
                                                                          -----------
    Total current assets                                                      106,846

Property, Plant & Equipment, net of accumulated depreciation                   23,240

Other assets:
  Mortgage note receivable                                                     14,000
                                                                          -----------
TOTAL ASSETS                                                              $   144,086
                                                                          ===========

                              LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Accounts payable - non-related party                                          7,764
  Accrued expenses - affiliate                                                  8,097
  Loans payable - current portion                                               3,230
                                                                          -----------
    Total current liabilities                                                  19,091

Loans payable                                                                   9,638
                                                                          -----------
TOTAL LIABILITIES                                                         $    28,729
                                                                          ===========

STOCKHOLDERS' DEFICIT:
  Common stock, $.001 par value, 50,000,000 shares authorized, 3,689,200
    shares issued and outstanding                                               3,689
Additional paid in capital                                                    126,111
Accumulated deficit                                                           (14,443)
                                                                          -----------
  Total Stockholders' Deficit                                                (115,357)
                                                                          -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                               $   144,086
                                                                          ===========

</TABLE>


<PAGE>

<TABLE>

<CAPTION>



                            HERITAGE MANAGEMENT, INC.
                             STATEMENT OF OPERATIONS
                Three and Six Months Ended June 30, 2004 and 2003
                                   (Unaudited)

                                                     Three Months Ended           Six Months Ended
                                                         June 30,                      June 30,
                                                    2004           2003           2004           2003
                                                -----------    -----------    -----------    -----------
<S>                                             <C>            <C>            <C>            <C>

Revenue                                         $     8,945    $    58,610    $    20,114    $   109,948

Operating expenses:
  Depreciation                                        1,837           --            3,673           --
  Other general and administrative                   30,213         77,131         44,173         96,384
                                                -----------    -----------    -----------    -----------
                                                     32,050         77,131         47,846         96,384
                                                -----------    -----------    -----------    -----------

Income (loss) from operations                   $   (23,105)   $   (18,521)   $   (27,732)   $    13,564
                                                -----------    -----------    -----------    -----------
Other income:
  Interest income                                       244            254            512            504
  Interest expense                                     (437)          (179)          (437)          (179)
                                                -----------    -----------    -----------    -----------
                                                       (193)            75             75            325
                                                -----------    -----------    -----------    -----------

Net income (loss) before provision for
income taxes                                        (23,298)       (18,446)       (27,657)        13,889

Provision (benefit) for income taxes                   --           (2,968)          --            2,553
                                                -----------    -----------    -----------    -----------

Net income (loss)                               $   (23,298)   $   (15,478)   $   (27,657)   $    11,336
                                                ===========    ===========    ===========    ===========
Net loss per share:
  Basic and diluted                             $     (0.01)   $     (0.00)   $     (0.01)   $     (0.00)
                                                ===========    ===========    ===========    ===========

Weighted average shares outstanding:
  Basic and diluted                               3,660,668      3,350,000      3,505,334      3,350,000
                                                -----------    -----------    -----------    -----------
</TABLE>





<PAGE>


                            HERITAGE MANAGEMENT, INC.
                             STATEMENT OF CASH FLOWS
                     Six Months Ended June 30, 2004 and 2003
                                   (Unaudited)



                                                           2004        2003
                                                          --------    --------
Cash flows from operating activities:
  Net loss                                                $(27,657)   $ 11,336
Adjustments to reconcile net loss to cash
 used in operating activities:
  Depreciation                                               3,673       1,864
 Changes in assets and liabilities:
  Note receivable                                            5,513        (504)
  Advances                                                 (17,857)      3,019
  Accounts payable and accrued expenses                      1,080        (796)
  Advances from affiliate                                       93

                                                          --------    --------
Net cash provided by (used in) operating activities        (35,155)     14,919
                                                          --------    --------
Cash flows from investing activities:
  Capital expenditures                                        --       (30,875)
                                                          --------    --------
Net cash used in investing activities                         --       (30,875)
Cash flows from financing activities:
  Sale of common stock for cash                             79,800        --
  Payments on note payable                                  (1,563)     (  503)
  Proceeds from note payable                                  --        16,459
                                                          --------    --------
Net cash provided by (used in) financing activities         78,237      15,956

Net decrease in cash                                        43,082        --
  Cash, beginning of period                                   --          --
                                                          --------    --------
  Cash, end of period                                     $ 43,082    $   --
                                                          ========    ========
Supplemental information:
  Income taxes paid                                       $   --      $   --
  Interest paid                                           $   --      $   --






<PAGE>




                            HERITAGE MANAGEMENT, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1: PRESENTATION

The balance sheet of Heritage Management, Inc. ("Heritage") as of June 30, 2004,
the related statements of operations for the three and six months ended June 30,
2004 and the  statements  of cash flows for the three and six months  ended June
30, 2004  included in the  financial  statements  have been prepared by Heritage
without  audit.  In  the  opinion  of  management,  the  accompanying  financial
statements include all adjustments (consisting of normal, recurring adjustments)
necessary  to  summarize  fairly  Heritage's  financial  position and results of
operations.  The results of  operations  for the three and six months ended June
30, 2004 are not  necessarily  indicative of the results of  operations  for the
full year or any other interim  period.  The  information  included in this Form
10-QSB should be read in conjunction with  Management's  Discussion and Analysis
and Financial  Statements and notes thereto included in Heritage's  December 31,
2003 Form 10-KSB.

NOTE 2 - COMMON STOCK

During the 2nd quarter  Heritage  sold  339,200  shares of common  stock for net
proceeds of $79,800.


NOTE 3 - ADVANCES

These  represent  advances  on  commissions  to be paid on loans that are in the
underwriting process and/or closing process.




<PAGE>


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

The  following  discussion  should  be read in  conjunction  with our  Financial
Statements  and Notes  thereto  which  appear  elsewhere in this  document.  The
results  shown  herein  are not  necessarily  indicative  of the  results  to be
expected  in  any  future  periods.  This  discussion  contains  forward-looking
statements based on current expectations,  which involve  uncertainties.  Actual
results   and  the  timing  of  events   could   differ   materially   from  the
forward-looking  statements as a result of a number of factors.  Readers  should
also  carefully  review  factors set forth in other reports or documents that we
file from time to time with the Securities and Exchange Commission.

Overview

During the second  quarter,  we spend  significant  time on the following  areas
which took some  emphasis  from our  immediate  revenue but  prepares a path for
increased future revenues.
Firstly,  we were  engaged in raising  funds  under our IPO under  which we were
approved to sraise a minimum  $60,000 and a maximum of  $500,000.  We closed the
offering on July 13, 2004 after selling a total of 527,400  shares and raising a
total of  $131,850.  This  capital  will allow us to put into action our plan of
growth and  operation  which was  described in our Form SB-1 filed with the U.S.
Securities & Exchange Commission.
Secondly,  we worked on a warehouse  line of credit of $1,000,000  which we were
able to get  approved  in early  July.  This  warehouse  line  allows us to be a
`correspondent',  selling  `closed  loans' and then sell  them on the  secondary
mortgage  market.  This allows us to sell `table funded loans' which should  net
the Company an additional $250 to $750 per loan.
Thirdly,  we began  making Home Equity Line of Credit loans  (HELOCs).  This has
only been  allowed  in Texas  since  September  2003.  So there is  significanbt
interest  in this type of loan.  The market for this loan can be seen by looking
at the  interest or this type of loan in states where it has been legal for many
years.
Fourthly,  we will be  purchasing  the  rights  to the name  `Discount  Mortgage
Source' and rights to the website  `DiscountMortgageSource.com'.  This will give
us the ability to offer online loan  application  and approval to higher  credit
buyers,  and allow us to follow up on buyers who cannot get approval through our
online  process.  Since we were  going to  develop  our own  website,  this will
shorten  the  time  involved  and  allow  us to offer  online  applications  and
approvals immediately.


RESULTS FOR THE FISCAL QUARTER ENDED June 30, 2004

Our fiscal  quarter  ended on June 30,  2004.  Any  reference  to the end of the
fiscal  quarter  refers to the end of the first  fiscal  quarter for the periods
discussed herein.

REVENUE.  Revenue for the three  months  ended June 30, 2004 and 2003 was $8,945
and $58,610 respectively and revenues for the six months ended June 30, 2004 and
2003 were $20,114 and $109,948 respectively.


<PAGE>


EXPENSES.  Total expenses for the three months ended June 30, 2004 and 2003 were
$32,050 and $77,131  respectively.  Expenses  for the six months  ended June 30,
2004 and 2003 were $47,846 and $96,384 respectively.

The weighted average shares  outstanding  increased due to the selling of shares
under our SB-1 offering referred to in the previous section.

LIQUIDITY AND CAPITAL RESOURCES. We posted a net loss of $23,298 and $15,478 for
the three  months  ended March 31, 2004 and 2003  respectively  and posted a net
loss of $27,657  and a net income of $11,336  for the six months  ended June 30,
2004 and 2003 respectively.










<PAGE>


ITEM 3.   CONTROLS AND PROCEDURES

(a)      Evaluation of disclosure controls and procedures
         ------------------------------------------------

         We maintain controls and procedures designed to ensure that information
         required to be  disclosed  in the reports  that we file or submit under
         the Securities Exchange Act of 1934 is recorded, processed,  summarized
         and reported  within the time periods  specified in the rules and forms
         of the Securities and Exchange Commission.  Based upon their evaluation
         of those controls and procedures  performed as of the end of the period
         covered by this  report,  our chief  executive  officer  and  principal
         financial officer concluded that our disclosure controls and procedures
         were adequate.

(b)      Changes in internal controls
         ----------------------------

         There were no significant  changes in our internal controls or in other
         factors that could  significantly  affect these controls  subsequent to
         the date of the  evaluation  of those  controls by the chief  executive
         officer and principal financial officer.


                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

We are not involved in any lawsuits and are not aware of any pending litigation.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

Not applicable.

ITEM 5.   OTHER INFORMATION

Not applicable.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

Not applicable.




<PAGE>


SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


Date: August 19, 2004                   HERITAGE MANAGEMENT, INC.

                                        By:  /s/ E. Lee Murdock
                                        ------------------------------------
                                                 E. Lee Murdock,
                                                 Chief Executive Officer
                                                 and Chief Financial Officer




<PAGE>


                                                                      Exhibit 31
CERTIFICATION
-------------


I, E. Lee Murdock, certify that:

1. I have  reviewed  this annual  report on Form 10-QSB of Heritage  Management,
Inc.

2.  Based on my  knowledge,  this  annual  report  does not  contain  any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)  designed  such  disclosure  controls  and  procedures,  or caused  such
     disclosure controls and procedures to be designed under our supervision, to
     ensure that material  information  relating to the small  business  issuer,
     including  its  consolidated  subsidiaries,  is made  known to us by others
     within those entities,  particularly during the period in which this report
     is being prepared;

     b) evaluated the  effectiveness of the small business  issuer's  disclosure
     controls and procedures and presented in this report our conclusions  about
     the effectiveness of the disclosure controls and procedures,  as of the end
     of the period covered by this report based on such evaluation; and

     c)  disclosed  in this  report  any change in the small  business  issuer's
     internal  control over financial  reporting that occurred  during the small
     business  issuer's most recent fiscal quarter (the small business  issuer's
     fourth fiscal  quarter in the case of an annual report) that has materially
     affected,  or is reasonably likely to materially affect, the small business
     issuer's internal control over financial reporting;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):

     a) all  significant  deficiencies  in the design or  operation  of internal


<PAGE>

     controls which could adversely affect the  registrant's  ability to record,
     process,  summarize and report  financial data and have  identified for the
     registrant's auditors any material weaknesses in internal controls; and

     b) any fraud,  whether or not material,  that involves  management or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls; and


Date: August 19, 2004

/s/  E. Lee Murdock
-------------------
     E. Lee Murdock
     Chief Executive Officer and Chief Financial Officer
















<PAGE>



                                                                      Exhibit 32

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In  connection  with the  Quarterly  Report of Heritage  Management,  Inc.  (the
"Company") on Form 10-QSB for the period ending June 30, 2004, as filed with the
Securities and Exchange Commission on the date hereof (the "Report'),  I, E. Lee
Murdock, Chief Executive Officer of the Company,  certify, pursuant to 18 U.S.C.
Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley  Act of
2002, that:

     (1) The Report fully  complies  with the  requirements  of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and result of  operations of the
Company.


/s/  E. Lee Murdock
-------------------
     E. Lee Murdock
     Chief Executive Officer and Chief Financial Officer


August 19, 2004