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

                                   Form 10-QSB


   Quarterly Report Section 13 or 15(d) of the Securities Exchange Act of 1934

                       For the quarter ended June 30, 2000

                          Commission File No. 000-26213

                             ARC COMMUNICATIONS INC.


            A New Jersey Corporation                       22-3201557

                              788 Shrewsbury Avenue
                         Tinton Falls, New Jersey 07724

                    Issuer's telephone number: (732) 219-1766

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 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 to such filing requirements for the past 90 days. Yes [X] No
[_]

     The number of shares outstanding of the Issuer's common stock as of June
30, 2000 was 13,713,122.

<PAGE>


ARC COMMUNICATIONS INC.

INDEX

PART 1.  FINANCIAL INFORMATION

     Item 1. Financial Statements (Unaudited)

     a)   Consolidated Balance Sheet as of June 30, 2000 ..............    3

     b)   Consolidated Statements of Operations for the Three
          and Six Months Ended June 30, 1999 and 2000 .................    4

     c)   Consolidated Statements of Cash Flows for the Six
          Months Ended June 30, 1999 and 2000 .........................    5

     d)   Notes to Consolidated Financial Statements ..................  6 to 7


     Item 2.  Management's Discussion and
              Analysis of Financial Condition
              and Results of Operations ...............................  8 to 11

PART II.  OTHER INFORMATION

     Item 6. Exhibits and Reports on Forms 8-K ........................    12

<PAGE>


PART 1 - FINANCIAL INFORMATION

Item 1 - Financial Statements


                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                    UNAUDITED

                                 June 30, 2000


                                     ASSETS

<TABLE>
<CAPTION>
                                                                                         June 30,
                                                                                           2000
                                                                                       -----------
<S>                                                                                    <C>
CURRENT ASSETS
      Cash and Cash Equivalents                                                        $   451,000
      Accounts Receivable-Net of Allowances for Doubtful Accounts
                of $49,000                                                                 876,000
      Inventory                                                                              6,000
      Prepaid Expenses                                                                      35,000
      Other Receivables                                                                      5,000
                                                                                       -----------
                Total Current Assets                                                     1,373,000
                                                                                       -----------

PROPERTY AND EQUIPMENT-NET                                                                 363,000

OTHER ASSETS
      Goodwill-Net                                                                          72,000
      Security Deposits                                                                      9,000
                                                                                       -----------

                Total Other Assets                                                          81,000
                                                                                       -----------

TOTAL ASSETS                                                                           $ 1,817,000
                                                                                       ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
      Line of Credit                                                                   $   243,000
      Accounts Payable and Accrued Expenses                                                314,000
      Billings in Excess of Costs                                                           77,000
      Capitalized Lease Obligations                                                          1,000
                                                                                       -----------
                Total Current Liabilities                                                  635,000
                                                                                       -----------

COMMITMENTS AND CONTINGENCIES

      Preferred Stock, Stated Value $.20; 5,000,000 Shares Authorized;
                720,000 Shares Issued and Outstanding in 2000                              144,000
      Common Stock, $.001 Par Value, Authorized 45,000,000 Shares, Issued
                and Outstanding 13,713,122 in 2000                                          14,000
      Additional Paid in Capital                                                         1,409,000
      Retained Earnings (Accumulated Deficit)                                             (385,000)
                                                                                       -----------
STOCKHOLDERS' EQUITY                                                                     1,182,000
                                                                                       -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                             $ 1,817,000
                                                                                       ===========
</TABLE>

<PAGE>

                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                    UNAUDITED

                                 June 30, 2000

<TABLE>
<CAPTION>
                                                              6 Months Ended     6 Months Ended    3 Months Ended     3 Months Ended
                                                                 June 30,           June 30,           June 30,           June 30,
                                                                   2000               1999               2000               1999
                                                               -----------        -----------        -----------        -----------
<S>                                                            <C>                <C>                <C>                <C>
NET SALES                                                      $ 2,515,000        $ 1,840,000        $ 1,321,000        $   874,000

COSTS AND EXPENSES
           Operating Costs                                         424,000            251,000            273,000            184,000
           Selling, General and Administrative                   1,638,000          1,201,000            829,000            587,000
           Depreciation and Amortization                            80,000             74,000             40,000             38,000
                                                               -----------        -----------        -----------        -----------

                     Total Costs and Expenses                    2,142,000          1,526,000          1,142,000            809,000
                                                               -----------        -----------        -----------        -----------

OTHER INCOME (EXPENSES)
           Interest Income                                           8,000              6,000              4,000              3,000
           Interest Expense                                        (23,000)           (21,000)           (11,000)            (9,000)
           Other Income                                                  0              2,000                  0                  0
                                                               -----------        -----------        -----------        -----------

                     Total Other Expense                           (15,000)           (13,000)            (7,000)            (6,000)
                                                               -----------        -----------        -----------        -----------

NET INCOME                                                     $   358,000        $   301,000        $   172,000        $    59,000
                                                               ===========        ===========        ===========        ===========

BASIC AND DILUTED
INCOME PER COMMON SHARE                                        $      0.03        $      0.02        $      0.01        $      0.00
                                                               ===========        ===========        ===========        ===========
                                                                13,712,000         13,751,000         13,713,000         13,751,000
</TABLE>

Weighted Average Number of Shares Outstanding

<PAGE>

                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                    UNAUDITED

                                 June 30, 2000

<TABLE>
<CAPTION>
                                                                                             June 30,          June 30,
                                                                                               2000              1999
                                                                                            ---------         ---------
<S>                                                                                         <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES

           Net Income                                                                       $ 358,000         $ 301,000
           Adjustments to Reconcile Net Income or Loss to Net Cash
                     Provided by Operating Activities:
                               Depreciation and Amortization                                   80,000            74,000
                               Bad Debt                                                        21,000            26,000

           Increase (Decrease) in Cash from Changes in:
                     Accounts Receivable                                                     (172,000)         (223,000)
                     Inventory                                                                  4,000            (7,000)
                     Prepaid Expenses                                                          (4,000)           (1,000)
                     Other Receivable                                                          (2,000)                0
                     Due from Related Party                                                    28,000            (3,000)
                     Accounts Payable and Accrued Expenses                                     14,000            16,000
                     Capitalized Lease Obligations                                             (2,000)                0
                     Deferred Revenue                                                          56,000                 0
                                                                                            ---------         ---------

                               Total Adjustments                                               23,000          (118,000)
                                                                                            ---------         ---------

                               Net Cash Provided by Operating Activities                      381,000           183,000
                                                                                            ---------         ---------


CASH FLOWS FROM INVESTING ACTIVITIES

           Expenditures for Property and Equipment                                            (82,000)          (48,000)
                                                                                            ---------         ---------

                               Net Cash Used in Investing Activities                          (82,000)          (48,000)
                                                                                            ---------         ---------


CASH FLOWS FROM FINANCING ACTIVITIES

           Repayment to Line of Credit                                                       (200,000)                0
           Proceeds from Notes Payable                                                              0            50,000
                                                                                            ---------         ---------

                               Net Cash Provided by (Used by) Financing Activities           (200,000)           50,000
                                                                                            ---------         ---------

NET INCREASE IN CASH                                                                           99,000           185,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                              352,000           224,000
                                                                                            ---------         ---------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                  $ 451,000         $ 409,000
                                                                                            =========         =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
           Cash Paid for Interest                                                              23,000            26,000
</TABLE>


<PAGE>

                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    Unaudited

                                 June 30, 2000


1.   Basis of Presentation

In the opinion of the Company, the accompanying consolidated financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to fairly present the Company's financial position and
its results of operations and cash flows as of the dates and for the periods
indicated.

Certain information and footnote disclosures normally contained in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. These condensed consolidated financial statements should be
read in conjunction with the audited December 31, 1999 consolidated financial
statements and related notes included in the Company's year end certified
financial statement. The results of operations for the three months are not
necessarily indicative of the operating results for the full year.

Amounts for the six months ended June 30, 1999 have been reclassified to conform
with the June 30, 2000 presentation.


2.   Principles of Consolidations

The consolidated financial statements included the accounts of the Company and
all of its subsidiaries in which a controlling interest is maintained. All
significant intercompany accounts and transactions have been eliminated in
consolidation.


3.   Revenue Recognition

The Company recognized revenue from sales at the date the product is shipped and
as professional services are performed.

<PAGE>

                    ARC COMMUNICATIONS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    Unaudited

                                 June 30, 2000


4.   Segment Information

<TABLE>
<CAPTION>
                                                                     6 Months Ended          6 Months Ended
                                                                         June 30,                June 30,
                                                                           2000                    1999
                                                                   -------------------     -------------------
<S>                                                                <C>                     <C>
            Revenue
                      Multi-Media                                  $         2,041,000     $         1,656,000
                      Continuing professional education                        474,000                 184,000
                                                                   -------------------     -------------------
                                Total Consolidated Revenue         $         2,515,000     $         1,840,000
                                                                   -------------------     -------------------

            Net Income (Loss)
                      Multi-Media                                  $           407,000     $           345,000
                      Continuing professional education                        (49,000)                (44,000)
                                                                   -------------------     -------------------
                                Total Consolidated Net Income      $           358,000     $           301,000
                                                                   -------------------     -------------------

            Assets
                      Multi-Media                                  $         1,613,000     $         1,512,000
                      Continuing professional education                        204,000                 154,000
                                                                   -------------------     -------------------
                                Total Consolidated Net Assets      $         1,817,000     $         1,666,000
                                                                   ===================     ===================
</TABLE>

<PAGE>

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

Overview

Arc  Communications  Inc. ("ARC" or the "Company" ) is a full-service  marketing
consulting  and  new  media  design  firm   specializing  in  sports  marketing,
technology  and  the  pharmaceutical   industry.   Services  include  marketing,
consulting, website development,  electronic commerce, interactive multi- media,
graphics design and imaging.

Arc, through its subsidiaries,  electronically publishes interactive educational
and reference material for the medical and dental professions,  provides on-line
continuing  professional education to the medical, dental and funeral director's
professions and provides on-line personal medical information.

Arc has organized  these lines of businesses  into two separate  product groups,
the multi-media group and continuing education group. These groups are supported
by a common  infrastructure.  This organization  structure allows Arc to develop
and grow multiple revenue streams by utilizing the common  infrastructure across
the product lines it currently has, as well as  cost-effectively  compete in new
and emerging markets.

Results of Operations

     Six Months Ended June 30, 2000 and June 30, 1999

Arc's net revenues for the six months  ended June 30, 2000 were  $2,515,000,  an
increase of $675,000 or 36.7% over the  $1,840,000  of net  revenues for the six
months ended June 30, 1999. In Arc's multi- media segment,  revenues for the six
months  ended June 30, 2000 and June 30, 1999 were  $2,041,000  and  $1,656,000,
respectively,  an increase of 23.2 percent. In its continuing education segment,
revenues for the six months ended June 30, 2000 and June 30, 1999 were  $474,000
and $184,000, respectively, an increase of 158 percent.

Our revenue growth continues to be driven by an expanding  revenue base in Arc's
core   businesses  of  internet  site   development,   interactive   multi-media
development and a new capability to deliver live  educational  seminars  through
its continuing professional education company, Arc Mesa Educators.

The increase in the multi-media  segment is a result of (1) website  development
revenue  increasing  $211,000 or 119.8%, as a result of Arc's expansion into the
burgeoning  area of  business-to-business  e-  commerce  (2)  revenue  from full
interactive  multi-media  development  increasing  $86,000  or 19.6%  and (3) an
increase in revenue from professional services of $88,000 or 8.6%.

The increase in revenue for continuing  professional  education is primarily due
to the new  capability  of  delivering  live  educational  seminars  through its
distance learning company.  This segment also benefitted from increased revenues
of continuing professional education delivered through our website.

<PAGE>

Results of Operations - Continued

Operating  costs for the six months  ended June 30,  2000 and June 30, 1999 were
$424,000  and  $251,000,  respectively.  The  increase is due to the increase in
costs relating to live educational seminars and outside vendor costs.

Selling,  general and administrative  expenses for the six months ended June 30,
2000  increased  to  $1,638,000,  an increase  of  $437,000  or 36.4%,  over the
$1,201,000 of expenses for the six months ended June 30, 1999. This increase was
primarily  due to expenses  incurred in the planned  expansion to providing  the
live  educational  seminars.  The increased  expenses  relating to the expansion
plans  included the costs of hiring several key personnel to support and develop
this segment.

Depreciation  and  amortization  expenses for the six months ended June 30, 2000
and June 30, 1999 were $80,000 and $74,000,  respectively,  a modest increase of
8.1  percent.  This  increase  is  attributable  to the  purchase of new desktop
computer systems in 2000.

Net income for the six months  ended June 30,  2000 of  $358,000  represents  an
increase of $57,000  from the net income of $301,000  reported for the six month
period  ended  June  30,  1999.  The  increase  primarily  due  to  increase  in
profitability  of the  multi-media  segment  as  well as the  growth  of the CPE
segment which has become profitable in the second quarter. As a result, earnings
per share were $0.03 compared to $0.02 for the same period in 1999.

     Three Months Ended June 30, 2000 and June 30, 1999

Arc's net revenues for the three months ended June 30, 2000 were $1,321,000,  an
increase of $447,000 or 51.1% over the  $874,000 of net  revenues  for the three
months ended June 30, 1999. In Arc's multi-media segment, revenues for the three
months  ended June 30,  2000 and June 30,  1999 were  $1,071,000  and  $763,000,
respectively,  an increase of 40 percent.  In its continuing  education segment,
revenues  for the  three  months  ended  June 30,  2000 and June 30,  1999  were
$250,000 and $111,000, respectively, an increase of 125 percent.

For several quarters, our revenue growth has been driven by an expanding revenue
base  in  Arc's  core  businesses  of  internet  site  development,  interactive
multi-media  development  and  through  its  continuing  professional  education
company,  Arc Mesa Educators,  by expanding its ability to provide  professional
education in the medical  field,  including  the new  capability to deliver live
seminars.

Operating  costs for the three months ended June 30, 2000 and June 30, 1999 were
$273,000  and  $184,000,  respectively.  The  increase is due to the increase in
costs relating to live educational seminars and outside vendor costs.

Selling, general and administrative expenses for the three months ended June 30,
2000 increased to $829,000,  an increase of $242,000 or 41.2%, over the $587,000
of  expenses  for the three  months  ended  June 30,  1999.  This  increase  was
primarily due to supporting  the increased  revenues from Arc's core  businesses
and to  expenses  incurred  in the  planned  expansion  to  providing  the  live
educational seminars.

<PAGE>

Depreciation and amortization  expenses for the three months ended June 30, 2000
and June 30, 1999 were $40,000 and $38,000,  respectively,  a modest increase of
5.3  percent.  This  increase  is  attributable  to the  purchase of new desktop
computer systems in 2000.

Net income for the three  months ended June 30, 2000 of $172,000  represents  an
increase of $113,000 from the net income of $59,000 reported for the three month
period  ended June 30,  1999.  The  increase  is  primarily  due to  increase in
profitability  of the  multi-media  segment  as  well as the  growth  of the CPE
segment which has become profitable in the second quarter. As a result, earnings
per share were $0.02 compared to essentially none for the same period in 1999.

Liquidity and Capital Resources

Arc is currently financing its operations  primarily through cash generated from
operations.  Cash flows from  operations  were $381,000 and $183,000 for the six
months ended June 30, 2000 and June 30, 1999, respectively. The increase in 2000
was  principally  attributable  to an  increase  in income  as well as  advanced
collections on Work In Process.

Cash flows used in  investing  activities  were $82,000 for the six months ended
June 30, 2000 as compared to $48,000 for the same period in 1999.  Cash used for
investing activities during the current period were for capital expenditures.

Arc uses its  working  capital to  finance  ongoing  operations  and to fund the
marketing and the  development  of its products and services.  At June 30, 2000,
the Company had working  capital of $738,000 as compared to $468,000 at June 30,
1999. Current assets increased by $196,000, from $1,177,000 at June 30, 1999, to
$1,373,000  at June 30, 2000,  while current  liabilities  decreased by $74,000,
from  $709,000 at June 30, 1999 to $635,000 at June 30,  2000.  The  increase in
current assets was primarily attributable to an increase in accounts receivable.
The change in current  liabilities  was due to the  repayment of $200,000 to the
line of credit  partially  offset by increases  in accounts  payable and accrued
expenses.  The Company  maintains a line of credit of  $750,000.  As of June 30,
2000, $506,000 of the line of credit remains available for future use subject to
collateral  restrictions.  The Company  utilizes  the line of credit for working
capital.  Although the Company believes that the amount available under the line
of credit is sufficient for its  short-term  requirements,  the Company  expects
that the line of credit might be increased  for its long term  financing  needs.
Management intends to obtain term financing in addition to its line of credit.

The  Company  anticipates  that  cash on hand and  cash  provided  by  operating
activities  will  maintain  an  appropriate  level  of  liquidity  and  will  be
sufficient to fund its operations for the next twelve months.

Business Strategies

Arc  continues  to position  itself to service the needs of the new media of the
Internet,  building  a strong  infrastructure  and  developing  capabilities  to
provide an end-to-end  solutions platform for our clients' internet  businesses.
The benefits of these  efforts have begun to be realized  with the addition of a
major national account as a customer during the current period.

These same efforts and the ability to leverage our internet capabilities will
continue to be applied to

<PAGE>

the  continuing  education  segment,  focusing on extending  the strong  revenue
growth realized from our live  educational  seminars and internet site education
programs.


                                   SIGNATURES

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

Date: August 10, 2000                   ARC COMMUNICATIONS INC.


                                        By:  /s/ Michael Rubel
                                             --------------------------------
                                             Michael Rubel
                                             Chief Operating Officer

<PAGE>

PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K

     a)   Exhibit 27 - Financial Data Schedule

     b)   A Form 8-K/A, dated April 12, 2000, was filed reporting the change of
          accountants which occurred on July 15, 1999.

          A Form 8-K/A, dated May 3, 2000, was filed reporting the change of
          accountants which occurred on July 15, 1999.