<PAGE>





                    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: September 30, 2000


                        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 170,238,655 shares of the Registrant's Common Stock outstanding as of
September 30, 2000


<PAGE>


                                      INDEX

Part  I: Financial Information

Item 1.  Financial Statements:

 Unaudited Consolidated Balance Sheet - as of September 30, 2000               2

 Unaudited  Consolidated  Statements  of  Operations,  Nine Months Ended
 September 30, 2000 and September 30, 1999 and the three months
 ending September 30, 2000 and September 30, 1999                              3

 Unaudited Consolidated Statement of Cash Flows, Nine Months Ended
 September 30, 2000 and September 30, 1999                                     4

 Notes to Consolidated Financial Statements                                  5-6

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

Part II:
 Other Information                                                             9

Item 1.  Legal Proceedings                                                     9

Item  2. Change in Securities                                                  9

Item  3. Defaults Upon Senior Securities                                       9

Item  4. Submission of matters to a vote of Security Holders                   9

Item  5. Other Information                                                     9

Item  6. Exhibits and Reports on Form 8-K                                     10

Signatures                                                                    10


<PAGE>

                    NEW YORK RAIL CORPORATION AND AFFILIATES
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2000
                                   (Unaudited)



                                     ASSETS

CURRENT ASSETS:
 Cash                                                      $             87,255
 Accounts receivable                                                    847,308
 Other current assets                                                   108,742
                                                             -------------------
  TOTAL CURRENT ASSETS                                                1,043,305

PROPERTY AND EQUIPMENT, net                                           4,358,438

OTHER ASSETS                                                             87,011
                                                             -------------------
                                                           $          5,488,754
                                                             ===================

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
 Accounts payable and accrued expenses                     $          3,282,207
 Notes payable and current maturities of long term debt               1,972,693
 Payroll and payroll taxes payable                                      745,088
                                                             -------------------
  TOTAL CURRENT LIABILITIES                                           5,999,988
                                                             -------------------

LONG TERM DEBT, NET OF CURRENT MATURITIES                               624,974

MINORTY INTEREST                                                        487,324

STOCKHOLDERS' DEFICIIT:
 Common stock, $ .0001 par value;
  authorized 200,000,000 shares;
  issued and outstanding 170,238,655 shares                              17,024
 Preferred stock series C convertible                                   500,000
 Additional paid-in capital                                          15,283,912
 Accumulated deficit                                                (17,424,468)
                                                             -------------------
  TOTAL STOCKHOLDERS' DEFICIT                                        (1,623,532)
                                                             -------------------
                                                           $          5,488,754
                                                             ===================












                 The accompanying notes are an integral part of
                           the financial statements.
                                        2
<PAGE>
                    NEW YORK RAIL CORPORATION AND AFFILIATES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>


                       Three Months Ended September 30,   Nine Months Ended September 30,
                      --------------------------------- ---------------------------------
                               2000            1999           2000            1999
                      --------------------------------- ---------------------------------
                           (Unaudited)      (Unaudited)    (Unaudited)     (Unaudited)


<S>                       <C>            <C>            <C>             <C>
OPERATING REVENUES        $  1,907,424   $   1,733,182  $   6,781,199   $   3,033,486

OPERATING EXPENSES           1,617,485       1,597,330      5,801,277       2,665,541
                         -------------    ------------- -------------    ------------

INCOME FROM OPERATIONS         289,939         135,852        979,922         367,945
                         -------------    ------------- -------------    ------------

ADMINISTRATIVE EXPENSES        102,760         111,523        918,144       1,124,782
                         -------------    ------------- -------------    ------------
INCOME (LOSS) FROM
 OPERATIONS                    187,179          24,329         61,778        (756,837)

INTEREST EXPENSE               (48,104)        (53,395)      (184,081)       (160,288)

BENEFICIAL CONVERSION
 FEATURE                          -         (6,023,699)          -         (6,023,699)
                         -------------    ------------- -------------    ------------

NET INCOME (LOSS) BEFORE
 MINORITY INTEREST             139,075      (6,052,765)      (122,303)     (6,940,824)

MINORITY INTEREST IN
 INCOME OF SUBSIDIARY          (66,190)        (22,160)      (145,989)        (63,479)
                         --------------   ------------- -------------    -------------

NET INCOME (LOSS)         $     72,885   $  (6,074,925) $    (268,292)  $  (7,004,303)
                         ==============   ============= =============    =============

INCOME (LOSS PER COMMON
SHARE-BASIC AND DILUTED   $       0.00   $       (0.04) $        0.00   $       (0.05)
                         ==============   ============= =============    =============

WEIGHTED AVERAGE NUMBER
 OF COMMON SHARES          161,500,000     151,284,460    161,500,000     151,284,460
                         ==============   ============= =============    =============


</TABLE>


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

                                        3

<PAGE>
                    NEW YORK RAIL CORPORATION AND AFFILIATES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
                                                 Nine Months Ended September 30,
                                                --------------------------------
                                                    2000                 1999
                                                --------------------------------
                                                 (Unaudited)         (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                     $   (268,292)        $ (7,004,303)
                                                ------------        ------------
 Adjustments to reconcile net loss to
  net cash used in operating activities:
   Depreciation                                    158,300              205,000
   Amortization                                       -                  35,000
   Minority interest in subsidiary earnings        145,989               80,629
   Beneficial conversion feature                      -               6,023,699

Changes in assets and liabilities:
 Increase in accounts receivable                  (206,064)            (413,396)
 Increase in prepaid expenses                      (18,000)                -
 (Increase) decrease in other current assets        21,273             (182,435)
 Increase (decrease) in accounts payable        (1,047,494)             309,792
 Decrease in accrued expenses                      361,787              228,477
 Inrease (decrease) in payroll taxes payable       179,081             (341,469)
 Increase in deferred rent                           3,625               10,000
                                             ---------------        ------------
                                                  (401,503)           5,955,297
                                             ---------------        ------------

NET CASH USED IN OPERATING ACTIVITIES             (669,795)          (1,049,006)
                                             ---------------        ------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Capital expenditures                             (386,827)            (261,117)
 Proceeds from sale of property and equipment       92,823                 -
 Increase in due to affiliates                      20,000                 -
 Decrease in other assets                            5,114                 -
 Increase in investment in subsidiary              (18,000)                -
                                             ---------------        ------------
NET CASH USED IN INVESTING ACTIVITIES             (286,890)            (261,117)
                                             ---------------        ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from notes payable                       475,000                  -
 Long term debt                                    117,538              (73,544)
 Convertible notes - other                        (232,896)             662,740
 Convertible notes - related party                (813,362)             654,532
 Other current debt - related party                   -                 (73,414)
 Other current debt                                (34,545)             (50,000)
 Proceeds from issuance of capital stock         2,079,833              198,889
 Preferred stock                                  (750,000)                -
                                             ---------------        ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES          841,568            1,319,203
                                             ---------------        ------------

NET DECREASE IN CASH                              (115,117)               9,080

CASH - BEGINNING OF PERIOD                         202,372                8,291
                                             ---------------        ------------

CASH - END OF PERIOD                          $     87,255         $     17,371
                                             ===============        ============




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

                                        4


<PAGE>

                   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. These financial statements
should be read in conjunction  with the  consolidated  financial  statements and
related  footnotes  for the year ended  December 31, 1999,  included in the Form
10-KSB for the year then ended.

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 September 30, 2000,  and the results of operations and cash flows
for the nine-month period ending September 30, 2000 and 1999 have been included.

The results of operations for the nine - month  period ended  September 30, 2000
are not necessarily  indicative of the results to be expected for the full year.
For further  information,  refer to the  consolidated  financial  statements and
footnotes  thereto  included  in the  Company's  Form  10-KSB as filed  with the
Securities and Exchange Commission for the year ended December 31, 1999.



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       170,238,655       17,024

The company has amended its Articles of Incorporation to increase the authorized
common stock to 200,000,000

a.       Changes in Securities:

         The Company issued  302,086 shares of its common stock in  satisfaction
         of bills for legal services in the amount of $63,480.

         In July 2000,  the  Company  issued to two  un-related  parties  25,000
         shares each of the  Company's  common stock in settlement of additional
         interest owed as a result of previous notes payable.

         In satisfaction of $63,000 dollars of the Company's  convertible  notes
         and the interest due thereon the Company issued 377,920 shares.


                                       5

<PAGE>

3.       LEGAL MATTERS AND OTHER CONTINGENCIES

                  In 1993 and again in 1995,  the Port Authority of New York and
New Jersey ("PANYNJ") obtained judgments against NYCH or 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 rental payments for Tug Boat owned by PANYNJ.

                  The  financial  statements  have been  restated to account for
these judgments.  The Company has reflected the full amount of the judgment as a
current  liability.  In  addition,  statutory  interest at a rate of 9% has been
accrued  annually.  Therefore  the effect of  recording  these  judgments  is to
increase current liabilities and decrease stockholders' deficit by approximately
$658,000 (including accrued interest of ($218,000).

                  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 PANYNJ  reached a temporary  repayment  agreement
whereby, NS would remit 20% of all accounts receivable due the Company to PANYNJ
until  such  time as a  permanent  agreement  could be  reached.  The  temporary
repayment agreement has been subsequently extended on several occasions. Through
July 2000  approximately  $25,000  has been  remitted  to the  PANYNJ in partial
satisfaction of the judgment. Management is currently negotiating with PANYNJ in
an attempt to arrive at a settlement amount and structure a long-term  repayment
schedule.

                  In researching  the judgment with the PA, we discovered that a
deal had  previously  been reached  regarding  this  dispute,  whereby NYCH (our
subsidiary),  agreed not to contest  the  judgment.  Along with other  terms and
conditions,  the PA agreed to settle the issue for $100,000.  One of the reasons
for such a reduction  was that the tugboat in question was not in the  condition
agreed upon its charter.  In  continuing  negotiations  with the PA, they agreed
that  the  Cross  Harbor  Floating  Operations  were  vital to the  region,  and
therefore the PA released the lien on a month-to-month basis. During fiscal year
2000 the company received 100 % of all revenues. Recently, upon further meetings
with the PA,  they agreed to release the lien until  further  notice.  They also
suggested that we submit to their Board for approval the benefits of our company
to interstate  commerce for both NY & NJ. It was felt that a compelling argument
would  greatly  reduce,  if not  totally  eliminate,  the  necessity  for future
payments.

<PAGE>


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

               This report  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
timing of orders  and  shipments,  market  acceptance  of  products,  ability to
increase level of production, impact of government requisitions, 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.


                                       6
<PAGE>

RESULTS OF OPERATIONS

                  During the nine months ending  September 30, 2000, the company
had  $6,781,199  in  revenue  compared  to  $3,033,406  in  revenue  during  the
corresponding  prior year  period.  The  increase  in revenue  was the result of
increase of rail car movement and trucking  operations.  The company had partial
period trucking operating revenues during the corresponding period last year.

                  Expenses for the nine months  ending  September  30, 2000 were
$5,801,277  compared to $2,665,541 for the corresponding  year. This increase in
expense is due to an increase in operations,  wages,  personnel and  maintenance
costs.

                  The company presently has no material  commitments for capital
expenditures.

                  The company is currently  reviewing  certain  transactions  by
former management. The has approved this action.

LIQUIDITY AND CAPITAL RESOURCES

                  The Company's  working  capital  deficit at September 30, 2000
was $4,956,683  compared to a deficiency of $5,147,857 at December 31, 1999. The
increase in working capital was primarily due to the conversion of approximately
$500,000 of  convertible  notes into shares of common and  preferred  stock.  In
addition,  the Company  recognized  profits from  operations for the nine months
ended  September 30, 2000 of $61,777 versus a loss from  operations for the nine
months ended September 30, 1999 of $756,837.

                  The Company's dramatic improvement in operating income was due
to increased  revenues and expense  reductions at both JST and NYCH.  Management
anticipates continued growth and increased  profitability in both its rail/barge
and trucking operations.  The acquisition of JST was a significant  contributor
to the overall  profits from  operations.  Management  intends on acquiring  the
remaining 49% of the outstanding shares of JST. The terms of the acquisition are
still under negotiation.  Management  anticipates completion of this transaction
in the near future.

                  Although  during  fiscal  2001 the  Company  expects  that its
operations  will  begin  to  generate  net  income,  the  Company   nevertheless
anticipates  that it will  suffer  losses of  approximately  $100,000  until the
Company becomes profitable.

As of September 30, 2000 the Company had the following liabilities;

   Accounts payable and accrued expenses        $       2,512,207
   Notes payable and current maturities
    of long-term debt                                   1,972,693
   Accrued real estate taxes                              770,000
   Payroll taxes payable                                  745,088

                                       7

<PAGE>

                  Accounts payable and accrued liabilities include $508,000 owed
for accrued interest on convertible notes and for accrued legal fees. A majority
of the legal fees are payable  through  options  granted to the  respective  law
firms. 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  $440,000. The Company is currently negotiating with the
PANYNJ for a long-term payout. Management is confident such an agreement will be
reached in the near future.

                  Accounts  payable and accrued  expenses  include $345,000 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 near future.

                   The notes payable are  convertible in nature.  The Company is
of the opinion  that all or  substantially  all of these notes will be converted
into shares of the Company's commons tock.

                  Based upon  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.

                  The Company is currently negotiating with the Internal Revenue
Service in an effort to settle all past payroll tax  liabilities.  At this point
in  the  negotiation,  it is  impossible  for  management  to  determine  if the
liability  can be  settled  for any amount  less than the  amount  that has been
statutorily  assessed  to the  Company.  Said amount is  reflected  as a current
liability in the company's financial statement.

Based upon the foregoing,  the Company's  anticipated capital needs for the next
twelve months are as follows;

  Operating Losses                                                      $100,000

  Payment of trade payables and accrued liabilities                     $100,000

  Repairs to Bush and Greenville terminals                              $100,000

  Repairs to locomotives and car floats                                 $100,000

  Payroll taxes, real estate taxes, and
   related interest and penalties                                       $750,000


                  The Company does not have any available credit, bank financing
or other external sources of liquidity.  Due to historical operating losses, the
Company's  operations  have not been a source of  liquidity.  Based upon  recent
operating  trends,  Management  feels that  Company  operations  will be able to
contribute to the  satisfaction of a portion of these  obligations.  In order to
fund its operating losses and satisfy aged  liabilities,  the Company intends on
warrant  holders  to  exercise  current  outstanding   warrants.   In  addition,
Management is currently  negotiating  with several federal and state  government
agencies that oversee the awarding of  transportation  infrastructure  grants of
which NYCHRR is qualified for.

                  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  and
become profitable.


                                       8
<PAGE>

Part II:          Other Information

Item:  1.         Legal Proceedings:

                  Fraser, McIntyre and Spartz v NYCH. Supreme Court of the State
of New York, County of Kings,  Index no. 45966/99 action commenced  November 23,
1999. This is a recently filed lawsuit by three individuals  alleging  ownership
in NYCH. One of the individuals, Stephen H. Fraser is a shareholder of NYCH. The
other two  individuals  sold their  interest  to Robert R.  Crawford in or about
1993.  These two  individuals  claim that they were not paid by  Crawford.  They
allege that NYCH has guaranteed the performance of Mr. Crawford.  Because of the
recent nature of this lawsuit we have not conducted an extensive  review of this
matter and at this time cannot comment on the viability of the allegation.


               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. Estate. The trustee claims that Murphy,  Marseilles,  Smith & Nammack, Inc.
made a loan to Best Sellers in the amount of $50,000. The Trustee has produced a
copy of a Note dated April 11, 1996.  NYRR has no record of having ever received
the money nor did Best Sellers disclose this obligation in the merger documents.
Further, we have been informed that a certification was executed by Martin Weber
whereby he  affirms  that Best  Sellers  never  authorized  the note nor did the
Company  receive the proceeds.  We are attempting to locate this  document.  The
Company  is  currently  assessing  the  merits of the  claim  and has  consulted
counsel.


Item  2. Changes in Securities:

a. The Company  issued  302,086  shares of its common stock in  satisfaction  of
   bills for legal services in the amount of $63,480.

b. In July 2000, the Company issued to two un-related parties 25,000 shares each
   of the Company's  common stock in  settlement  of additional  interest owed
   as aresult of previous notes payable.

c. In satisfaction of $63,000 dollars of the Company's convertible notes and the
   interest due thereon the Company issued 377,920 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

                                       9

<PAGE>

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


(a)      Exhibit 27  Financial Data Schedule Filed herewith Electronically

         (b)      Reports on Form 8-K:

                  None


                                   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:  November 14, 2000                 /s/RONALD W. BRIDGES
                                         ____________________________
                                         RONALD W. BRIDGES, PRESIDENT

Date:  November 14, 2000
                                         /s/JOEL MARCUS
                                         _____________________________________
                                         JOEL MARCUS , CHIEF FINANCIAL OFFICER



                                       10