SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB/A

                                 Amendment No.1

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

                        For Quarter Ended March 31, 2002
                                       OR

             [ ] 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: 0-13181

                          CAPITAL BEVERAGE CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

              Delaware                            13-3878747
  (State or other jurisdiction of             (I.R.S. Employer
   incorporation or organization)              Identification No.)

    700 Columbia Street, Erie Basin, Building #302, Brooklyn, New York 11231
    ------------------------------------------------------------------------
               (Address of Principal Executive Office)             (Zip Code)

                                 (718) 488-8500
               (Registrant's telephone number including area code)

Indicate by check mark whether the registrant (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 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

         Yes    X                        No
            -----------                    -----------

The number of shares of registrant's Common Stock, $.001 par value, outstanding
as of May 15, 2002 was 3,178,409 shares.


<PAGE>



                          CAPITAL BEVERAGE CORPORATION
                                   FORM 10-QSB
                                 March 31, 2002

                                      INDEX
                                                                          PAGE
                                                                         NUMBER

PART I.  FINANCIAL INFORMATION


Item 1.  Consolidated Financial Statements (Unaudited)

              Balance Sheet as of March 31, 2002                           3

              Statement of Operations for the three-months
                 ended March 31, 2002 and 2001                             4

              Statement of Cash Flows for the three-months
                 ended March 31, 2002 and 2001                             5

              Notes to Consolidated Financial Statements                   6

Item 2.  Management's Discussion and Analysis or Plan of Operations       7-8

PART II. OTHER INFORMATION

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

Signatures                                                                10



<PAGE>
                          CAPITAL BEVERAGE CORPORATION
                     d/b/a Diversified Distributors Network

                           CONSOLIDATED BALANCE SHEET

                                 MARCH 31, 2002
                                   (Unaudited)



                                     ASSETS

CURRENT ASSETS:
 Cash                                                      $             27,425
 Accounts receivable - trade,
  net of allowance for doubtful
  accounts of $346,106                                                  455,072
 Inventories                                                          3,501,657
 Prepaid expenses and other                                               9,624
                                                             -------------------
         TOTAL CURRENT ASSETS                                         3,993,778

PROPERTY AND EQUIPMENT,
 less accumulated depreciation
 of $113,829                                                            270,001

OTHER ASSETS:
 Intangible assets                                                    4,358,462
 Other assets                                                           147,037
                                                             -------------------
                                                           $          8,769,278
                                                             ===================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
 Cash overdraft                                            $            759,237
 Accounts payable                                                     2,179,596
 Accrued expenses and taxes                                             167,527
 Revolving loans                                                      1,671,625
 Due to officer                                                           5,148
 Deposits payable                                                        15,000
 Current portion of long-term debt                                      836,448
 Current portion of capital lease obligations                            48,549
 Accrued dividends on preferred stock                                   100,000
                                                             -------------------
         TOTAL CURRENT LIABILITIES                                    5,783,130
                                                             -------------------

CAPITAL LEASE OBLIGATIONS                                               145,020

LONG-TERM DEBT                                                        2,046,420

STOCKHOLDERS' EQUITY:
 Common stock, $ .001 par value;
  authorized 20,000,000 shares;
  issued and outstanding 3,178,409 shares                                 3,179
 Additional paid-in capital                                           5,747,773
 Accumulated deficit                                                 (4,956,244)
                                                             -------------------
         TOTAL STOCKHOLDERS' EQUITY                                     794,708
                                                             -------------------
                                                           $          8,769,278
                                                             ===================



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

                                        3
<PAGE>

                          CAPITAL BEVERAGE CORPORATION

                     d/b/a Diversified Distributors Network

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                        Three Months Ended March 31,
                                  ----------------------------------------------
                                         2002                     2001
                                  ----------------------------------------------
                                      (Unaudited)            (Unaudited)


SALES                            $     6,075,053         $     2,632,568
COST OF GOODS SOLD                     4,557,319               2,154,529
                                  ----------------------   ---------------------
GROSS PROFIT                           1,517,734                 478,039
                                  ----------------------   ---------------------
OPERATING EXPENSES
 Selling and delivery                    422,169                 233,020
 General and administrative            1,593,997                 566,961
                                  ----------------------   ---------------------
                                       2,016,166                 799,981
                                  ----------------------   ---------------------
LOSS FROM OPERATIONS                    (498,432)               (321,942)

INTEREST EXPENSE                        (123,302)                (15,048)

INTEREST INCOME                            2,302                     120

CUMULATIVE EFFECT OF CHANGE
 IN ACCOUNTING PRINCIPLE                (860,000)                      -
                                  ----------------------   ---------------------
NET LOSS                         $    (1,479,432)        $      (336,870)
                                  ======================   =====================

LOSS PER  COMMON SHARE - BASIC AND DILUTED:
 NET LOSS BEFORE CUMULATIVE
  EFFECT OF CHANGE IN ACCOUNTING
  PRINCIPLE                     $         (0.19)        $          (0.13)
 CUMULATIVE EFFECT OF CHANGE
  IN ACCOUNTING PRINCIPLE                 (0.28)                      -
                                  ----------------------   ---------------------
     NET LOSS                   $         (0.47)        $          (0.13)
                                  ======================   =====================

WEIGHTED AVERAGE NUMBER
 OF COMMON SHARES                       3,178,409               2,678,409
                                  ======================   =====================





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

                                        4
<PAGE>

                          CAPITAL BEVERAGE CORPORATION
                     d/b/a Diversified Distributors Network

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                Three Months Ended March 31,
                                            ------------------------------------
                                                2002                    2001
                                            ------------------------------------
                                              (Unaudited)            (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                 $  (1,479,432)        $      (336,870)
                                            -----------------    ---------------
 Adjustments to reconcile net
  loss to net cash used in
  operating activities:
   Depreciation and amortization                 16,824                  53,609
   Change in accounting principle               860,000                       -

 Changes in assets and liabilities:
  Accounts receivable                           (73,882)                (16,802)
  Inventories                                (1,586,765)                505,552
  Prepaid expenses                                 (373)                  3,073
  Increase in deferred expenses                       -                 (10,284)
  Other assets                                   (1,990)                   (393)
  Deposits payable                               15,000                       -
  Accounts payable and accrued expenses         (90,847)               (218,760)
                                            -----------------  -----------------
                                               (862,033)                315,995
                                            -----------------  -----------------
NET CASH USED IN OPERATING ACTIVITIES        (2,341,465)                (20,875)
                                            -----------------  -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Revolving loans                                (13,058)                      -
 Payments to officer                            (14,000)                      -
 Principal payments of capital
  lease obligations                             (15,841)                (12,943)
 Payment of accrued dividends
  on preferred stock                            (25,000)                      -
 Cash overdraft                                 759,237                       -
 Payment of long-term debt                     (458,873)                      -
 Decrease in  note payable                     (136,361)                (19,600)
                                           ------------------  -----------------
NET CASH USED IN (PROVIDED BY)
 FINANCING ACTIVITIES                            96,104                 (32,543)
                                           ------------------  -----------------
NET DECREASE IN CASH                         (2,245,361)                (53,418)
CASH - BEGINNING OF PERIOD                    2,272,786                 191,342
                                           ------------------  -----------------
CASH - END OF PERIOD                      $      27,425       $         137,924
                                           ==================  =================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION:
     Cash paid for interest               $     123,302      $           15,048
                                           ==================  =================





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

                                        5
<PAGE>

                          CAPITAL BEVERAGE CORPORATION
                     d/b/a Diversified Distributors Network

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                 March 31, 2002

                                   (Unaudited)

1.       BASIS OF PRESENTATION

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

                  Certain financial information which is normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles, but which is not required for interim reporting
         purposes has been condensed or omitted. The accompanying financial
         statements should be read in conjunction with the financial statements
         and notes thereto contained in the Company's Annual Report on Form
         10-KSB.

2.  DISTRIBUTION LICENSE


                  Effective January 1, 2002, the Company adopted SFAS Nos. 141
         and 142. SFAS 142 eliminates amortization of goodwill and certain other
         intangible assets, but requires annual testing for impairment
         (comparison of fair market value to carrying value). Fair value is
         estimated using the present value of expected future cash flows and
         other measures. The Company used a discount rate of 6%. The
         transitional impairment test for the distribution rights resulted in an
         non-cash charge of $860,000 in the first quarter of 2002 which was
         recorded as a cumulative effect of change in accounting principle.
         Pursuant to SFAS 142 an impairment test was performed during the first
         quarter of 2002. The impairment test concludes that the Company will
         recover the full amount of the distribution license over 20 years based
         on forecasts which begin with actual sales as of April 30, 2002 which
         increase 5% annually thereafter for increased sales and inflation.

                  The Company acquired these exclusive rights to distribute
         within the five boroughs of New York City as part of the agreement with
         Prospect in May 2001. The rights consist of the Pabst brands which make
         up approximately 58% of sales and include brand names such as Colt 45,
         Champale and Old Milwaukee. The Pittsburgh brands make up approximately
         16% of sales and include brand names such as Nighflight, Mustang Lager
         and Primetime. Other brands make up 26% of sales and consist mostly of
         Hansens Energy Drinks. The Company determined that these rights have an
         indefinite life because the terms of the agreements are indefinite.
         Furthermore, the franchise law of New York State, states that any
         terminated distributor is entitled to get "fair market value" for the
         brand distribution rights.



                                       6
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

     The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of  operations  and  financial  condition.  This  discussion  should  be read in
conjunction with the financial  statements and notes thereto appearing elsewhere
herein.

     Statements  in this Form 1O-QSB that are not  statements  of  historical or
current fact constitute  "forward-looking  statements" within the meaning of the
Private  Securities   Litigation  Reform  Act  of  1995.  Such   forward-looking
statements  involve  known and unknown  risks,  uncertainties  and other unknown
factors  that could  cause the actual  results of the  Company to be  materially
different  from the historical  results or from any future results  expressed or
implied by such  forward-looking  statements.  In  addition to  statements  that
explicitly describe such risks and uncertainties,  readers are urged to consider
statements labeled with the terms "believes,"  "belief,"  "expects,"  "intends,"
"anticipates"   or   "plans"   to  be   uncertain   and   forward-looking.   The
forward-looking  statements contained herein are also subject generally to other
risks and  uncertainties  that are described  from time to time in the Company's
reports and  registration  statements  filed with the  Securities  and  Exchange
Commission. Results of Operations

     Net  sales for the  three  months  ended  March  31,  2001 were  $6,075,053
reflecting an increase of  $3,442,485  or 131% from  $2,632,568 of net sales for
the three months  ended March 31,  2001.  The increase in the three months ended
March 31, 2002 resulted primarily from the acquisition of Prospect Beverage Inc.
in June, 2001.

     Cost of sales was $4,557,319 or 75% of net sales for the three month period
in 2002,  as  compared  to  $2,154,529  or 82% of net sales for the three  month
period  ended in 2001.  The  decrease in cost of goods sold as a  percentage  of
sales for the three  months  ended  March 31,  2002,  was due  primarily  to the
addition of new brands which were added to our portfolio in the  acquisition  of
Prospect Beverages, Inc. in June of 2001, specifically the Colt 45 label.

     Selling,  general and  administrative  expenses for the three-month  period
ended March 31, 2002 were  $2,016,166 as compared to $799,981 for the respective
2001  period.  The  increase  in the three  months  ended March 31, 2002 was due
primarily to the costs incurred in the  acquisition of Prospect  Beverages Inc.,
as well as the increase in costs to deliver the higher sales volume.

     Interest  expense  for the  three-month  period  ended  March  31,2002  was
$123,302 as compared to $15,048 for the respective 2001 period.  The increase in
the three-month period ended March 31,2002 was due primarily to interest paid on
the new CBC  Bank  line of  credit  and  additional  leases  acquired  with  the
acquisition in June of 2001.

     Interest income for the three-month  period ended March 31, 2002 was $2,302
as  compared  to $120  for the  respective  2001  period.  The  increase  in the
three-month period resulted from interest earned on the escrow funds relating to
the sale of the Miller rights.

                                       7
<PAGE>


     Cumulative  effect of change  in  accounting  principle  of  $860,000  is a
write-down of the distribution  license based on the impairment test pursuant to
SFAS 142.


      Liquidity and Capital Resources

     Cash used in  operations  for the three  months  ended  March 31,  2002 was
$2,341,465.  The  increase  in  inventories  of  $1,586,765  was  due to  higher
purchases of inventory  caused by the  additional  products added to our product
line due to the acquisition.

     Working  capital  decreased  from  $(1,037,327)  at  December  31,  2001 to
$(1,789,352) at March 31, 2002 due to the operating loss of the Company.

     At March 31, 2002, the Company's  primary sources of liquidity were $27,425
in cash, $455,072 in accounts receivable and $3,501,657 in inventories.

     Management  believes  it has  sufficient  sources  of  working  capital  to
adequately meet the Company's needs through the end of 2002.


                                       8
<PAGE>

PART II - OTHER INFORMATION


Item 1.  LEGAL PROCEEDINGS
         ------------------

                  Not applicable

Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS
         -----------------------------------------

                  Not applicable

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

                  (a)     Exhibits:

                          Exhibit 99.1 Certification of Chief Executive Officer

                          Exhibit 99.2 Certification of Secretary and Treasurer


                                        9
<PAGE>

                                   SIGNATURES


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

                                      CAPITAL BEVERAGE CORPORATION


Date: August 13, 2002              /s/Carmine N. Stella, President and
                                      Chief Executive Officer,
                                      as  Registrant's duly authorized officer


                                   /s/Carol Russell,
                                      Secretary and Treasurer







                                       10