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



                                   FORM 10-QSB



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

                 For the quarterly period ended: June 30, 2001


                        Commission file number: 000-28583


                             NEW YORK REGIONAL RAIL
                    CORPORATION (Exact name of small business
                       issuer as specified in its charter)


                               DELAWARE 13-3081571
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)



                        4302 First Ave Brooklyn, NY 11232
          (Address of principal executive offices, including zip code)


                                 (718) 788-3690
                           (Issuer's telephone number)


 Indicate by check mark whether the Issuer (1) has filed all reports required to
be   filed   by   Section   14 or 15 (d) of the Exchange Act during the  past 12
months(or for such shorter period that the registrant was  required to file such
reports), and (2) has been  subject  such  filing  requirements for  the past 90
days.

                                Yes [ X ] No [ ]


There were 171,426,189 shares of the Registrant's Common Stock outstanding as of
July 30, 2001.


<PAGE>





                                      INDEX

Part  I:          Financial Information

Item 1.           Financial Statements:

Unaudited Consolidated Balance Sheet - as of June 30, 2001 ........3

Unaudited Consolidated Statements of Operations,
Three and Six Months Ended June 30, 2001 and June 30, 2000..........4

Unaudited Consolidated Statements of Cash Flows,
Six Months Ended June 30, 2001 and June 30, 2000....................5

Notes to Consolidated Financial Statements.........................6-9

Item 2.   Management's Discussion and Analysis or
          Plan of Operations.......................................10-13


Part II:  Other Information..........................................14

 Item 1.  Legal Proceedings..........................................14

 Item 2.  Change in Securities.......................................14

 Item 3. Defaults Upon Senior Securities.............................14

 Item 4. Submission of matters to a vote
                    of Security Holders..............................14

 Item 5. Other Information...........................................14

 Item 6. Exhibits and Reports on Form 8-K............................14


Signatures...........................................................15









<PAGE>










               NEW YORK REGIONAL RAIL CORPORATION AND AFFILIATES
                           CONSOLIDATED BALANCE SHEET

                                  (Unaudited)



                                     ASSETS

                                                     June 30,
                                                       2001
                                                    -----------
CURRENT ASSETS:
 Cash                                              $    98,301
 Accounts receivable - trade, net of allowance
   for doubtful accounts of $106,461                   403,520
 Other current assets                                   65,000
                                                    -----------
  TOTAL CURRENT ASSETS                                 566,821

PROPERTY AND EQUIPMENT, net                          3,500,499

OTHER ASSETS                                           919,495
                                                    -----------
                                                   $ 4,986,815
                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
 Accounts payable
  and accrued expenses                             $ 2,480,754
 Notes payable and
  current maturities of long term debt               1,558,057
 Payroll and payroll taxes payable                     989,641
                                                    -----------
         TOTAL CURRENT LIABILITIES                   5,028,452
                                                    -----------

DEFERRED RENT PAYABLE                                  113,935

LONG TERM DEBT, NET OF CURRENT MATURITIES            1,017,984

MINORTY INTEREST                                         7,652

TEMPORARY EQUITY                                     1,512,500

STOCKHOLDERS' DEFICIT:
 Common stock, $ .0001 par value;
  authorized 200,000,000 shares;
  issued and outstanding 171,426,189 shares             17,143
 Preferred stock series C convertible                  500,000
 Additional paid-in capital                         12,253,088
 Accumulated deficit                               (15,463,939)
                                                    -----------
 TOTAL STOCKHOLDERS' DEFICT                         (2,693,708)
                                                    -----------
                                                   $ 4,986,815
                                                   ============

               The accompanying notes are an integral part of the
                              financial statements.

                                       3
<PAGE>


                NEW YORK REGIONAL RAIL CORPORATION AND AFFILIATES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>



                                                          Three Months Ended June 30,       Six Months Ended June 30,
                                                            2001               2000            2001             2000
                                                        --------------     -------------  ---------------    ------------
<S>                                                   <C>                <C>            <C>                <C>
Operating revenues                                    $     1,167,061    $    2,471,671 $      2,366,994   $   4,873,775

Operating expenses                                            900,728         2,035,973        1,895,754       4,183,792
                                                        --------------     -------------  ---------------    ------------
Gross Profit                                                  266,333           435,698          471,240         689,983

Administrative expenses                                       344,931           492,586          805,298         762,113
                                                        --------------     -------------  ---------------    ------------
Loss from operations                                          (78,598)          (56,888)        (334,058)        (72,130)

Other income (expenses):
Interest expense                                              (55,556)         (132,238)        (112,091)       (887,597)
Beneficial conversion                                            -              (11,556)            -            (17,333)
Loss on disposal of fixed assets                              (64,500)             -             (64,500)           -
                                                        --------------     -------------  ---------------    ------------
                                                             (120,056)         (143,794)        (176,591)       (904,930)
                                                        --------------     -------------  ---------------    ------------
Loss before minority interest                                (198,654)         (200,682)        (510,649)       (977,060)

Minority interest in (income) loss of subsidiary               15,746           (28,943)          77,582         (79,799)
                                                        --------------     -------------  ---------------    ------------

Net loss                                                     (183,178)         (229,625)        (433,067)     (1,056,859)

Deemed preferred stock dividend                                12,500             4,167           25,000           4,167
                                                        --------------     -------------  ---------------    ------------
Net loss to common shareholders                       $      (195,678)   $     (233,792) $      (458,067)  $  (1,061,026)
                                                        ==============     =============  ===============    ============
Loss per share - basic and diluted                    $         (0.00)    $       (0.00) $         (0.00)  $       (0.01)
                                                        ==============     =============  ===============    ============
Weighted common shares                                    171,426,189       168,879,179      170,977,470     165,332,104
                                                        ==============     =============  ===============    ============
</TABLE>


               The accompanying notes are an integral part of the
                              financial statements.

                                        4


<PAGE>



                NEW YORK REGIONAL RAIL CORPORATION AND AFFILIATE
                      CONSOLIDATED STATEMENT OF CASH FLOWS

                                                    Six Months Ended June 30,
                                                    ----------------------------
                                                         2001           2000
                                                    ----------------------------
                                                      (Unaudited)    (Unaudited)
                                                                     (Restated)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                             $   (433,066) $(1,056,859)
                                                         ---------    ---------
Adjustments  to  reconcile
 net loss to net cash  (used  in)  provided  by
 operating activities:
Depreciation and amortization                             274,122      229,131
Non-cash compensation                                     180,950         -
Bad debt expense                                          236,384         -
Warrants and options issued for debt                         -         751,620
Beneficial conversion feature                                -          17,333
Minority interest in subsidiary earnings                  (77,582)      79,799

Changes in assets and liabilities:
Decrease in accounts receivable                          (200,504)     (29,358)
(Increase)/decrease in current assets                      26,000       45,500
Decrease in other assets                                   55,299        5,400
Increase/(decrease) in accounts payable                   113,343     (522,437)
Increase/(decrease) in accrued expenses                  (111,362)    (293,365)
Increase in payroll taxes payable                          84,056      254,750
Increase/(decrease) in deferred rent                       12,435         -
                                                          ---------    ---------
                                                          593,141      538,373
                                                          ---------    ---------
NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES                                     160,075     (518,486)
                                                          ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES
 Loss on disposal of fixed assets                           64,500         -
 Capital expenditures                                     (115,296)   (113,273)
                                                          ---------    --------
NET CASH USED IN INVESTING ACTIVITIES                     ( 50,796)   (113,273)
                                                          ---------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Payments of long term debt                                (52,048)   (147,109)
 Proceeds from long term debt                                 -        202,500
 Proceeds from other current debt- related party              -        320,000
                                                          ---------    ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES        (52,048)    375,391
                                                          ---------    ---------
NET INCREASE/ (DECREASE) IN CASH                            57,231    (256,368)

CASH - BEGINNING OF PERIOD                                  41,070     202,974
                                                          ---------    ---------
CASH - END OF PERIOD                                     $  98,301   $  53,394
                                                          =========    =========


  The  accompanying  notes are  an  integral  part  of the financial statements.

                                    5
<PAGE>
                NEW YORK REGIONAL RAIL CORPORATION AND AFFILIATES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  statements and with the instructions to Form 10-QSB and Article 10 of
Regulation  S-X.  Accordingly,  they  do not  include  all the  information  and
disclosures required for annual financial statements.

     In the opinion of the Company's management,  all adjustments (consisting of
normal recurring  accruals)  necessary to present fairly the Company's financial
position as of June 30, 2001 are included.

     The results of operations  for the six - month period ended June 30, 2001
are not necessarily indicative of the results to be expected for the full year.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules, goodwill and intangible assets deemed to
have indefinite lives will no longer be amortized but will be subject to annual
impairment tests in accordance with the Statements. Other intangible assets will
continue to be amortized over their useful lives. The Company will apply the new
rules on accounting for goodwill and other intangible assets beginning in the
first quarter of 2002. Application of the non-amortization provisions of the
Statement is not expected to have a material effect on the Company's financial
position or operations.

Loss on Disposal of Fixed Assets

During the six months ended June 30, 2001 the Company's incurred a "loss on
disposal of fixed assets" in the amount of $64,500.
In 1999, the Company agreed to purchase three locomotives for $126,000, under
the condition that these locomotives were to be put into a usable condition. The
seller failed to comply and in 2001 negotiated a settlement, in which the
Company was granted title to the locomotives in an "as is" condition for the
previously paid $84,000. However, the Company could not find the parts needed to
fix these units and was being charged daily storage. The Company sold these
locomotives during the quarter for $19,500, resulting in a loss totaling $64,500
during the year.

2.       CAPITAL STOCK
                                                     Number of Shares
                                                     Issued and
                                    Authorized       Outstanding       Amount
                                    ----------       -----------      --------
Preferred C                            500,000          500,000        500,000

Common $.0001 par value            200,000,000      171,426,189         17,143


3.       LEGAL MATTERS AND OTHER CONTINGENCIES

The City of New York  ("plaintiff") has brought suit against the Company,  NYCH,
and its former  President in U.S.  District Court,  Eastern District of New York
for the  purpose  of  recovering  the cost of  removal  and  cleanup  of certain
hazardous  substances and petroleum.  The suit alleges that certain parties were
instructed by the Company to dispose of the substances in an illegal manner. The
plaintiff is seeking recovery of approximately  $600,000 which it claims to have
spent on the investigation  and cleanup of the alleged disposal,  as well as all
future  investigation  and cleanup  costs and the cost of this  litigation.  The
Company is currently in settlement negotiations with the City.

In June 1997,  the Company  filed a complaint in U.S.  District  Court,  Eastern
District of New York against  Conrail,  claiming that Conrail  violated  federal
antitrust  laws by  adopting  policies  and  procedures  which were  designed to
restrain trade and undermine interstate commerce.  The suit further alleges that
Conrail  established a systematic policy of offering  predatory and preferential
rates for shippers to move freight on Conrail through its Albany route,  thereby
re-routing rail traffic away from the Company. The Company is seeking damages of
$901 million. The court declined Conrail's request for a dismissal, and required
that the Company's claims be heard by an arbitrator.  Pending  arbitration,  the
Company is exploring the  possibility  of a settlement  with CSX  Transportation
("CSXT") and Norfolk Southern  Railroad ("NSR"),  the acquirers of Conrail.  The
Company cannot give any assurance that discussions with CSXT or NSR will lead to
a settlement of the claims.


                                       6
<PAGE>

The City of New York has billed the Company in excess of $3,200,000 for property
taxes dating back to 1984. The Company claims that the tax  assessments  are for
the most part  erroneous  because they relate  either to real  property that the
Company does not own or lease,  or to property  which is not subject to the real
property tax. The Company  further claims that New York City taxing  authorities
have  assessed  taxes  based on  flawed  valuations,  resulting  in  substantial
overcharges.  The New  York  State  Board of  Equalization  and  Assessment  has
proposed significant reductions to these valuations,  subject to the approval of
the New York City  Corporation  Counsel.  Preliminary  negotiations are underway
between  the  Company's  representatives,  the New York  City  Real  Estate  Tax
Assessor,  and the Corporation Counsel's office. Pending a settlement of the tax
arrears,  the  Company  has  recorded  a  liability  on its  books of  $473,700,
representing  the  tax  due on the  Bush  Terminal  property,  the  only  parcel
currently  used in the rail  operations.  Management  expects,  but cannot  give
assurance, that the outstanding liabilities will be settled for a lesser amount.

The State of New Jersey has assessed the Company approximately $63,000 per year
since 1996 for real estate taxes. The Company believes that the assessment is
incorrect and the proper tax should be approximately $17,000 annually. Pending a
settlement, the Company has recorded a liability on its books of approximately
$386,300 for these real estate taxes. The Company is working to resolve this
dispute.

In 1993 and  again  in  1995,  the  Port  Authority  of New York and New  Jersey
("PANYNJ")  obtained  judgments  against NYCH for  approximately  $440,000.  The
judgments are for claims  involving rent arrearages on property  occupied by the
Company  at the  PANYNJ's  Atlantic  Terminal  facility  and for  accrued  lease
payments  and  miscellaneous  repairs  for a Tug Boat owned by the  PANYNJ.  The
financial  statements  reflect a liability of approximately  $772,000 related to
these  judgments  including  statutory  interest  at a rate of 9% per annum.  In
January  2000,  the  PANYNJ  enforced  its  judgments  by  placing a lien on the
Company's  accounts  receivables with Norfolk Southern ("NS").  In February 2000
the Company and the PANYNJ reached an agreement whereby,  NS remitted 20% of all
accounts receivable due the Company to the PANYNJ. To date approximately $19,000
has been  remitted  to the  PANYNJ in  partial  satisfaction  of the  judgments.
Subsequently,  the Company and PANYNJ have entered into settlement  negotiations
for a substantially  lesser amount.  During these  negotiations,  the PANYNJ has
agreed to suspend any collection efforts.

Platinum  Funding Corp.  ("Platinum")v.  New York Regional  Rail, New York Cross
Harbor  Railroad  Terminal  Corp. and CH Partners,  Inc.,  Superior Court of New
Jersey,  Law Division,  Bergen County Docket  No:BER-L-10413-98  on December 24,
1998.  The  Company  was named in a lawsuit  by its former  factoring  agent for
approximately  $250,000.  The  balance  resulted  from  a  dispute  involving  a
factoring  agreement  which the  Company  entered  into in  December  1995.  The
arrearage represents a combination of uncollected accounts receivable, factoring
fees  and  fees  charged  due  to  the  Company's   inability  to  meet  certain
predetermined  minimum  factoring levels. In March 1999, the case was dismissed.
In December  1999,  the Company  entered into an  agreement  whereby the Company
issued  300,000  shares of its common stock into escrow in the name of Platinum.
These shares were to be registered and sold on behalf of Platinum until $250,000
was attained from said sale.  Any unsold  balance of the 300,000 shares would be
returned to treasury. If the proceeds of $250,000 were not attained, the Company
would issue additional shares to be registered and sold until the total proceeds
to Platinum  would be  $250,000.  The Company has been unable to register  these
shares for sale and they still remain in escrow. Platinum refiled the lawsuit in
October 2000.  Currently,  the Company is negotiating a settlement with Platinum
and  believes a  settlement  will be  reached.  The Company  has  reflected  the
liability  to  Platinum  as a  current  liability  in  the  Company's  financial
statements.  Depending  on the  terms of the  settlement,  these  shares  may be
returned to treasury and/or this liability may be changed.

The Company is also a party to routine  claims and suits  brought  against it in
the ordinary course of business. Some of these matters are covered by insurance.
In the opinion of  management,  the outcome of these  claims is not  expected to
have a material adverse effect on the Company's business,  financial  condition,
or results of operations. The Company has established a reserve of approximately
$315,000 for the estimated costs of litigation and settlements.

The Company's Board of Directors is reviewing transactions by former Management.
The Company does not anticipate that there will be any adverse  material effects
on it, as a result of its review.
                                       7
<PAGE>

4.   Segment Information

The  following  information  is  presented  in  accordance  with  SFAS No.  131,
Disclosures About Segments of an Enterprise and Related  Information,  which was
adopted by the Company during 1999.

The following tables provide summarized information concerning the Company's
reportable segments.

                                  Railroad         Trucking             Total
                                -------------   ---------------      -----------
As of June 30, 2001
-----------------------
Segment assets                  $ 3,283,424      $ 1,703,391         $4,986,815

Three months ended June 30, 2001
----------------------------------
Operating revenues              $ 363,250       $  803,811           $1,167,061
Gross profit                      197,354           68,979              266,333
Segment profit (loss)            (167,071)         (16,107)            (183,178)
Interest income                      -                -                    -
Interest expense                   35,458           21,077               56,535
Depreciation and amortization      40,236           69,925              110,161

                                  Railroad         Trucking             Total
                                -------------   ---------------      -----------
Three months ended June 30, 2000
----------------------------------
Operating revenues            $   196,810       $2,274,861          $ 2,471,671
Gross profit                      129,894          305,804              435,698
Segment profit (loss)            (269,271)          39,646             (229,625)
Interest income                      -                -                    -
Interest expense                  121,982           10,256              132,238
Depreciation and amortization      37,283           20,000               57,283


Six months ended June 30, 2001
----------------------------------
Operating revenues             $  685,047       $1,681,947           $2,366,994
Gross profit                      350,073          121,167              471,240
Segment profit (loss)            (352,319)         (80,748)            (433,067)
Interest income                      -                -                    -
Interest expense                   71,085           41,006              112,091
Depreciation and amortization     134,272          139,850              274,122

                                  Railroad         Trucking             Total
                                -------------   ---------------      -----------
Six months ended June 30, 2000
----------------------------------
Operating revenues            $   321,894       $4,549,721          $ 4,873,775
Gross profit                      213,058          476,925              689,983
Segment profit (loss)          (1,175,735)         118,876           (1,056,859)
Interest income                      -                -                    -
Interest expense                  877,485           10,112              887,597
Depreciation and amortization      74,560           40,000              114,560

MAJOR CUSTOMER

Trucking  operations sales to Waste Management Inc.,  represented  approximately
12% of net sales  for the six  months  ended  June 30,  2001 and 2000;  trucking
operations sales to Atlantic  Demolition  represented  approximately 13% for the
six months ended June 30, 2000;  trucking  operations  sales to Construction and
Demolition represented  approximately 25% for the six months ended June 30, 2001
and trucking operations sales to Republic Services represented approximately 12%
of net sales for the six months ended June 30, 2001. There was no other customer
of the Company whose sales exceeded 10%.

                                       8

<PAGE>

5.      RESTATEMENT

The  accompanying  financial  statements have been restated to properly  reflect
restatements made to the financial statements of 2000.

The 2000  financial  statements  have been  restated to reflect the  issuance of
warrants on conversion of notes in March of $673,358 and May of $43,680,  the
beneficial conversion feature on $20,000 of notes issued in March 2000 of $5,778
and $40,000 of notes issued in April 2000 of $11,556 and the reversal of a
liability of $53,271.

The effect of such restatements on the Company's quarterly financial statement
is as follows:

                                           As                            As
                                        Reported      Adjustments     Restated
                                      ------------------------------------------

Statement of Operations
 Adjustments

Three months ended June 30, 2000
 Loss from operations                $     56,888   $       -      $     56,888
 Net loss                                 157,098         72,527        229,625
 Net loss per common share basic     $      (0.00)  $       -      $      (0.00)

Six months ended June 30, 2000
 Loss from operations                $    125,401   $    (53,271)  $     72,130
 Net loss                                 341,177        715,682      1,056,859
 Net loss per common share basic     $      (0.00)  $       -      $      (0.01)




                                      9


<PAGE>

Item 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion contains forward-looking statements that involve a
number of risks and uncertainties. While these statements represent the
Company's current judgment in the future direction of the business, such risks
and uncertainties could cause actual results to differ materially from any
future performance suggested herein. Certain factors that could cause results to
differ materially from those projected in the forward-looking statements include
level of freight shipments, competition, future contractual terms with landfill
authorities, impact of government regulations, availability of capital to
finance growth and general economic conditions.

                  The following should be read in conjunction with the attached
financial statements and notes thereto of the company.

RESULTS OF OPERATIONS

The components of the Company's operating revenues and expenses by business
segment during the six months  ended June 30, 2001 were

                                            Railroad       Trucking

Operating revenues                         $ 685,000       $1,682,000
Operating expenses                         $ 335,000       $1,561,000
Gross profit                               $ 350,000       $  121,000


                  During the six months ended June 30, 2001, the Company had
$2,366,994 in revenue compared to $4,873,775 in revenue during the corresponding
prior period, a decrease of $ 2,506,781 or 51.4%. This decrease was due to a
decrease in the trucking operations to approximately $1,682,000 from
approximately $4,550,000 for the corresponding period in 2000, due to the loss
of the Gloucester Landfill contract, a decrease of 63%.

                  Operating expenses for the six months ended June 30, 2001
were $1,895,754 compared to $4,183,792 a decrease of $2,288,038 or 54.7%. This
decrease in expense is due to the corresponding decrease in revenues from the
loss of the Gloucester Landfill contract.

                  Operating expenses as a percentage of operating revenues were
85.8% for the six months ended June 30, 2000. In 2001 operating expenses
decreased to 80.1% of operating revenues due to the larger percentage of revenue
coming from the railroad, the more profitable segment. Operating expense from
rail operations increased by 207% in 2001 to approximately $335,000 from
approximately $109,000 in 2000.

       Administrative expenses increased in the six months ended June 30,
2001, by $43,000. As a percentage of operating revenues, administrative
expenses increased to 34% for the six months ended June 30, 2001, from 15.6%
for the six months ended June 30, 2000. The increase of $43,000, comes primarily
from a reserve for possible bad debts of approximately $236,000 and non-cash
compensation of approximately $181,000 offset by a decrease in payroll and other
payroll related expenses.

      Interest expense was $112,000 for the six months ended June 30, 2001, as
compared to $888,000 for the six months ended June 30, 2000. This major
reduction was due to the fact that the Company did not have to raise any money
during the quarter and therefore did not issue any convertible debt. In the
prior period the Company recognized beneficial conversion feature and interest
on the issuance of warrants and options on the sale of promissory notes which
were convertible into shares of the Company's common stock at prices below
prevailing market rates, of $769,000.

      During the six months ended June 30, 2001 the Company's incurred a "loss
on disposal  of fixed  assets" in the amount of  $64,500.  In 1999,  the Company
agreed to purchase  three  locomotives  for $126,000,  under the condition  that
these locomotives were to be put into a usable  condition.  The seller failed to
comply and in 2001  negotiated  a  settlement,  in which the Company was granted
title  to the  locomotives  in an "as  is"  condition  for the  previously  paid
$84,000. However, the Company could not find the parts needed to fix these units
and was being charged daily storage.  The Company sold these locomotives  during
the quarter for $19,500, resulting in a loss totaling $64,500 during the year.

      The Gloucester contract terminated on December 31, 2000 as per the
agreement. The contract was not renewed because  Gloucester,  which was selling
excess  capacity to  out-of-county  waste suppliers - ran out of spare space and
was unable to renew the contract.  The Company verbally  sub-contracted  with an
in-county  waste  supplier to  Gloucester  to dump the  Company's  out-of-county
waste.  The per ton rate was only  slightly  higher than the  Company's  expired
agreement  with  Gloucester.  This  agreement  only  lasted  one  month  due  to
Gloucester  informing  the  contractor  that if it wanted to renew its agreement
upon expiration it would have to terminate  immediately all out-of-county  waste
dumping.  The Company has also  negotiated two  additional  contracts with other
landfills; Eagle Land Management in PA and Recovermat in MD. Both agreements are
at  slightly  higher  rates than  previous  agreements.  The Company was able to
convert  some of its  customers  to these  landfills,  however  due to the extra
distance,  lack of the Company providing credit terms and increased costs, other
landfills became cost competitive and the Company began to lose its marketshare.

                                       10
<PAGE>

      The temporary loss of a food producer plus the loss of the waste
transporter has caused a decrease in rail revenues  during the quarter.  In late
June 2001, the Company was able to replace the waste transporter and anticipates
more new customers in the future.

      Because of difficulties experienced in the trucking operations and the
basic nature of the rail  industry,  in which,  it takes time to  negotiate  and
finalize  agreements,  yet these agreements are often for extremely  long-terms.
The Company began to focus its sales on rail moves.  The Company  believes sales
of joint  movements  both trucking and rail,  will make the business grow and be
sustainable.  Additionally, it sees the ability to make these joint movements as
a competitive advantage.

      The Company recognized a net loss for the six months ended June 30,
2001 of $433,000 versus a loss for the six months ended June 30, 2000 of
$1,057,000.

LIQUIDITY AND CAPITAL RESOURCES

                The Company's working capital deficit at June 30, 2001 was
$4,461,631 compared to a deficiency of $3,849,205 at December 31, 2000. The
decrease in working capital was primarily due to the reclass of $517,000 in
receivables to long-term assets and a reclass of a $84,000 deposit, for
locomotives to a loss on disposal of fixed assets, in the amount of $64,500.
(See Note 1 - Loss on Disposal of Fixed Assets for additional information in on
this matter.) The Company recognized a loss from operations for the six months
ended June 30, 2001 of $334,058 versus a loss from operations for the six months
ended June 30, 2000 of $72,130 with the decrease coming primarily from the
reserve against certain assets of $236,000.

As of June 30, 2001 the Company had the following liabilities;

   Accounts payable and accrued expenses        $       2,480,754
   Notes payable and current maturities
    of long-term debt                                   1,558,057
   Payroll taxes payable                                  989,641

                  Accounts payable and accrued liabilities include $332,000 owed
for accrued interest on convertible notes, debt and for accrued legal fees. The
Company anticipates that most of the accrued interest and legal fees will be
satisfied through the exercise of said conversion features.

                  Accounts payable and accrued expenses include a perfected
judgement by the Port Authority of New York and New Jersey ("PANYNJ") in the
amount of approximately $790,000 including interest. The Company is currently
negotiating with the PANYNJ for a long-term payout. Management is confident such
an agreement will be reached in the future.As of July 31, 2001 an agreement has
yet to be finalized and the PANYNJ has not made any further attempts to enforce
its judgments.

              Accounts payable and accrued expenses include $200,000 in accrued
rent.  In February  2001 both the Company and Conrail  Shared  Assets  Operation
("CSAO"),  the successor to Conrail,  submitted its appraisal of the fair market
rental value of the property  subject to the terms of the 1993 lease  agreement.
Based  upon  different  interpretations  of the rent  calculation  per the lease
agreement,  CSAO contends that the Company has a rent arrearage of approximately
$1,800,000.  Based upon the Company's legal counsel's interpretation of the rent
calculation,  rent arrearages  total  approximately  $200,000.  Both parties are
currently in negotiations.

                  Accounts payable and accrued expenses include $135,000 to a
former customer for advances and accrued tug boat charges. Management has been
negotiating a settlement in exchange for shares of common stock and anticipates
a resolution in the future.

                Accounts payable and accrued expenses also include approximately
$860,000  for  accrued  real estate  taxes.  The City of New York has billed the
Company  in  excess  of  $3,200,000  for  property  taxes  dating  back to 1984.
Management expects, but cannot give assurance,  that the outstanding liabilities
will be settled for a lesser  amount.  Pending a settlement  of the tax arrears,
the Company has  recorded a  liability  on its books of $473,700  for these real
estate  taxes.  Based upon  recent  discussions  the  Company has had with local
taxing  authorities,  the Company  believes  that its  liability for real estate
taxes can be settled  for  approximately  $150,000.  As of July 31,  2001,  this
dispute  has not yet been  settled.  The State of New  Jersey has  assessed  the
Company  approximately  $63,000 per year since 1996 for real estate  taxes.  The
Company  believes that the  assessment is incorrect and the proper tax should be
approximately $17,000 annually. Pending a settlement, the Company has recorded a
liability on its books of  approximately  $386,300 for these real estate  taxes.
The  Company  is working to resolve  this  dispute.  (See Note 3 for  additional
information in regards to this matter.)

                                       11

<PAGE>

                  The Company is currently negotiating with vendors, federal and
state taxing authorities and the holders of several material obligations,
whereby management is confident that settlement of these amounts will be
significantly less than the amounts currently recognized on the Company's books.
Long-range plans considered by management include application for low interest
loans through the Federal Rail Administration ("FRA") for short-line railroad's
and grants from New York and New Jersey State Department of Transportation.

                  During the six months ended June 30, 2001 the Company's
operations provided $160,075 in cash and the Company acquired approximately
$115,000 of property and equipment. From the cash generated by operations the
Company paid down long-term debt by approximately $52,000.

                  The Company has incurred substantial losses since it was
formed. Although the Company expects to continue to incur losses until such
time, if ever, as it earns net income. Management has taken many steps to
improve profitability and increase revenues. The Company has reduced outstanding
liabilities substantially which has in turn reduced interest expense.Between
January 1998 and February 2000, the Company reduced administrative
expenses by the reduction of over nine full-time employees from its workforce
and has reduced operating costs through better utilization of manpower,
equipment and other expense reductions. Since February 2000, the Company has
continued to reduce operating costs through the better utilization of its
manpower, its use of part-time employees, use of part-time outside labor and the
use of more modern fleets, which reduced maintenance and downtime, in both its
trucking and rail operations.

                  In 1999, the Company agreed to purchase three locomotives for
$126,000,  under the  condition  that  these  locomotives  were to be put into a
usable  condition.  The  seller  failed  to  comply  and in  2001  negotiated  a
settlement,  in which the Company was granted title to the locomotives in an "as
is" condition for the previously  paid $84,000.  However,  the Company could not
find the parts needed to fix these units and was being  charged  daily  storage.
The Company sold these locomotives during the quarter for $19,500,  resulting in
a loss totaling $64,500 during the year. The Company used the proceeds from this
sale to enter into a maintenance  free lease of two more  powerful  locomotives.
These  leased  locomotives  do not require the Company to employee a mechanic in
its operations,  which had historically cost the Company approximately  $60,000,
of which $40,000 was annually salary and approximately  $20,000 per year was the
cost of parts and other expenses.

                  The Company has needed to fund its working capital deficit.
The Company has raised these funds though issuance of floating rate convertible
debentures. The Company agreed to the terms of the convertible notes because the
Company was unable to obtain conventional financing due to the Company's
financial condition.

                  The Company has no commitments for capital expenditures over
the next twelve months.

                  The Company expects that any additional tractors or trailers
required by JST can be acquired through capital leases or similar types of
equipment financing. JST has been able to arrange these types of financing since
January of 2000.

                  The Company rail operations do not have any available credit,
bank financing or other external sources of liquidity. Due to historical
operating losses, the Company's rail operations have not been a source of
liquidity. Until such time as the Company becomes profitable, the Company's
continued operations will depend upon the availability of additional funding. In
order to obtain capital, the Company may need to sell additional shares of its
common stock or borrow funds from private lenders. There can be no assurance
that the Company will be able to obtain additional funding, if needed, or, if
available, on terms satisfactory to the Company. There can be no assurance that
the Company will be able to generate sufficient revenues to be profitable.

                  Additionally, there are administrative remedies available to
the Company's  creditors  including,  but not limited to,  judgments,  liens and
levies, which can be placed on the Company's bank accounts.  Historically, these
remedies  have been used by the  creditors  of the Company and have  resulted in
additional  cash flow hardships for the Company.  There can be no assurance that
these remedies may not be used in the future.


                                       12


<PAGE>

                  The Company has been in negotiations with the respective
agencies  in  regards  to  the  following  disputed  current  liabilities.   The
liabilities  include  approximately  $1 million in payroll taxes,  approximately
$790,000 in principle  and interest  owed to the PANYNJ,  and the  approximately
$860,000  in real  estate  taxes  to New  York  and New  Jersey.  These  current
liabilities  amount to approximately $2.7 million and the bulk of this amount is
over one year old.  These  agencies  are working with the Company to resolve the
disputed amounts. It is the Company's expectation,  although no guarantee can be
given, that these  liabilities will be settled for  substantially  less than the
$2.7 million accrued.  The Company further expects long-term  repayment plans to
be granted.  In  addition  to these  liabilities  there are  approximately  $1.3
million in convertible  or related party debts.  Holders of these debts have not
demanded  payment and it is expected that the majority of the  convertible  note
holders will opt for conversion into the Company's  common stock.  Additionally,
$244,000 of current  maturities  of long-term  debt is primarily  for  equipment
leases and are payable over 12 months;  and trade  payables,  which  account for
approximately  $351,000,  are being paid in  accordance  with their  terms.  The
Company  reasonably expects to continue to pay these two accounts from cash flow
from  operations.  The  remaining  liabilities  of  approximately  $400,000  are
primarily  accruals for what the Company  believes  could be the  liability  for
settlement of pending lawsuits.

                  The Company continues to expect that it will be able to meet
all its routine working  capital needs and  operational  costs from new business
created  based on  customer  demand.  The  following  discussion  relates to the
Company's actual experiences versus its expectations. The Company has continued
to improve its rail  operation's  margins through the reductions in per diem car
hire charges,  reduced manpower,  tow and maintenance costs.  However,  revenues
were  impacted  by  problems  encountered  in  trucking  operations  and  by the
following:  During the  six-week  period  between  April 10 and May 21, 2001 the
Company  transported   approximately  twenty-five  carloads  for  a  local  food
producer.  These cars'  freight was then  emptied and the freight was  re-loaded
into  waiting  trucks  for  local  delivery.  The  gross  revenue  per  car  was
approximately  $1,400.  In order to maintain this business the Company needed to
build a permanent loading dock facility at its Brooklyn  terminal.  Due to costs
and permits required the Company has yet to construct this facility and until it
does  this  business  can no  longer be done at the  Company's  facilities.  The
Company  anticipates  the return of this  business,  sometime in the future,  by
utilizing either its own yard or Canadian  Pacific's yard at 65th Street,  which
has a permanent  loading dock. In February the Company  entered into a long-term
freight  transportation  agreement,  to transport  New York City  biosoilds  for
Merco, a sub-contractor for the City. This transportation began in May 2001, the
gross  rail  revenues  from  this  agreement  from May 15 to June  15,  2001 was
approximately  $46,000.  In July 2001, the City of New York  terminated  Merco's
agreement and thereby the Company's agreement.

                  The Company had based its original expectations on the
operational  profit  anticipated  from  these  customers.   The  loss  of  these
customers,  which utilized both trucking and rail  services,  and the additional
problems we have encountered in the landfill portion of our trucking  operations
have caused revenues to decrease.  Based on actual and projected volumes,  these
customers  would have  accounted for more than $70,000 in monthly sales revenues
for the trucking and rail  operations.  In mid June, we added a new customer for
both our rail and trucking  operations.  The Company's  rail  operation has been
able to attract new business,  for both itself and our trucking  operation.  The
Company anticipates that it will continue to be able to add new customers, which
will allow the Company to meet its cash obligations.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, Business Combinations, and No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. Under the new rules, goodwill and intangible assets deemed to
have indefinite lives will no longer be amortized but will be subject to annual
impairment tests in accordance with the Statements. Other intangible assets will
continue to be amortized over their useful lives. The Company will apply the new
rules on accounting for goodwill and other intangible assets beginning in the
first quarter of 2002. Application of the non-amortization provisions of the
Statement is not expected to have a material effect on the Company's financial
position or operations.

                                       13
<PAGE>
                           Part II: Other Information

Item:  1.         Legal Proceedings:

Murphy,  Marseilles,  Smith & Nammack,  Inc. Chapter 7 Case No. 98 B 42104 (SMB)
Richard E. O'Connell v NYRR Adversary Proceeding No. 00-02413. This is an action
brought  by the  trustee  for the  Murphy,  Marseilles,  Smith &  Nammack,  Inc.
bankruptcy estate. The bankruptcy trustee claims that Murphy, Marseilles,  Smith
& Nammack,  Inc.  made a $50,000 loan to the Company in April 1996.  The Company
has settled this claim for $7,500 in April 2001.

Item  2. Changes in Securities:

On March 22, 2001 the Company issued 9,500 shares of restricted stock,  pursuant
to its "Stock Bonus Plan",  to  employees of its rail  subsidiary.  These grants
were  issued  on the  basis of years  employed.  On the  date of the  grant  the
Company's  Common stock was valued at $0.10.  The Company has  recorded  $950 as
compensation expense.

On March 21, 2001, the Company issued  1,000,000 shares in the name of W. Robert
Bentley.  These shares will be distributed to Mr.Bentley in accordance  with his
employment  and  settlement   agreements  with  the  Company of 1997  and  2000,
respectively.

The Company relied upon the exemption provided by Section 4(2) of the Securities
Act of 1933 in connection  with the sale of these shares  described  above.  The
securities referred to in this paragraph are "restricted"  securities as defined
in Rule 144 of the Securities and Exchange Commission. No underwriters were used
and no commissions were paid in connection with the issuance of these shares.

Item  3. Defaults Upon Senior Securities:

                  None

Item  4. Submission of Matters to a Vote of Security Holders:

                  None

Item  5. Other Information:

                  None

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

         (a)

                                Index to Exhibits
 Exhibit
   No.    Description

  10.2    Truck Transportation Agreement between Unified Services group and
          NYCH Railroad Company dated June 15, 2001. (Incorporated by reference
          to Exhibit 10.2 of the Registrant's quarterly report on Form 10-QSB
          Registration No.028583 filed December 3, 2001).

         (b)      Reports on Form 8-K:

                  8-K/A filed June 26, 2001 with date of report of November 22,
                  2000.

                                       14

<PAGE>

                                   Signatures


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


Date: December 28,2001             By:/s/ Ronald Bridges
                                          ----------------------------
                                          Ronald Bridges, President

Date: December 28,2001             By:/s/ Joel Marcus
                                          ---------------------------------
                                          Joel Marcus, Chief Financial Officer


                                       15