<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 10-QSB

(Mark One)

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

For the quarterly period ended           March 31, 2001
                                  --------------------------------------

[ ]  TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from                   to
                               -----------------     -----------------

Commission file number 0-5474

              NORTH AMERICAN GAMING AND ENTERTAINMENT CORPORATION
     ---------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

              Delaware                                  75-2571032
     ----------------------------                   -------------------
(State or other jurisdiction of             (IRS Employer Identification No.)
 incorporation or organization)

               13150 Coit Road, Suite 125, Dallas, Texas  75240
       ----------------------------------------------------------------
                   (Address of principal executive offices)

                        (   972   )      671   -   1133
                     -------------------------------------
                          (Issuer's telephone number)


Check whether the issuer (1) has filed all reports required to be filed by
Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months, and (2) has been subject to such filing requirements for the past 90
days.

                                     Yes   xxx     No
                                          -----        -----

Number of shares of common stock, par value $.01 per share, outstanding as of
March 31, 2001: 25,105,458

Transitional Small Business Disclosure Format (Check One):  Yes        No  xx
                                                                -----     ----
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
================================================================================

<TABLE>
<CAPTION>

                                                                                March 31,     December 31,
                                                                                   2001          2000
                                                                               (Unaudited)
------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>            <C>
ASSETS
Current assets:

Cash                                                                           $     4,750   $    17,225
Advances to related parties                                                          6,900       156,900
Investment in available-for-sale securities                                              -        47,002
Prepaid expenses                                                                    59,248        68,800
Deferred tax asset                                                                 233,770       258,000
                                                                               -----------   -----------

Total current assets                                                               304,668       547,927
                                                                               -----------   -----------

Furniture and equipment, net of accumulated depreciation                             6,859         9,739
                                                                               -----------   -----------

Other assets:

Deposits                                                                             3,246         3,246
Investments - restricted                                                            30,464        35,250
Investments - other                                                                870,000       769,073
                                                                               -----------   -----------

Total other assets                                                                 903,710       807,569
                                                                               -----------   -----------

Total assets                                                                   $ 1,215,237   $ 1,365,235
                                                                               ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of notes payable                                               $   273,297   $   245,797
Accounts payable and accrued liabilities                                            89,306        83,500
Due to former stockholders                                                               -       150,000
Due to related entity                                                              161,000       130,000
Preferred stock dividends payable                                                   15,003        15,003
                                                                               -----------   -----------

Total current liabilities                                                          538,606       624,300

Notes payable - long-term                                                          440,000       467,500
                                                                               -----------   -----------

Total liabilities                                                                  978,606     1,091,800
                                                                               -----------   -----------

Commitments and contingencies

Stockholders' Equity:

Class A preferred stock, $3.00 par value, 10% annual cumulative dividend,
    1,600,000 shares authorized, no shares issued and outstanding                        -             -
Preferred stock, $.01 par value, 10,000,000 shares authorized,
    8,000,000 shares designated Series B, no shares issued and outstanding               -             -
Common stock, $.01 par value, 100,000,000 shares authorized, 41,788,552
    shares issued                                                                  417,886       417,886
Additional paid-in capital                                                         489,214       489,214
Treasury stock, 16,683,094 shares, at cost                                        (489,258)     (489,258)
Accumulated other comprehensive loss - unrealized
    loss on available for sale securities, net of income taxes                     (11,524)      (51,506)
Accumulated deficit                                                               (169,687)      (92,901)
                                                                               -----------   -----------
To stockholders equity                                                             236,631       273,435
                                                                               -----------   -----------


Total liabilities and stockholders' equity                                     $ 1,215,237   $ 1,365,235
                                                                               ===========   ===========
</TABLE>

                                       1
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>

                                                                               Three Months Ended March 31,
                                                                               ----------------------------
                                                                                    2001         2000
-----------------------------------------------------------------------------------------------------------
<S>                                                                           <C>              <C>

Revenue                                                                        $         -   $         -

General and administrative expenses                                                123,438       225,166
Depreciation and amortization                                                        2,880         2,880
                                                                               -----------   -----------

Operating loss                                                                    (126,318)     (228,046)

Interest expense                                                                   (15,638)      (18,413)
Income from equity investments                                                     100,927       113,851
Gain (loss) on sale of investments                                                 (85,758)      357,528
Other income (expense)                                                              50,000        25,555
                                                                               -----------   -----------

Income (loss) before provision
  for income taxes                                                                 (76,787)      250,475

Provision for income taxes                                                               -             -
                                                                               -----------   -----------

Net income (loss)                                                              $   (76,787)  $   250,475
                                                                               ===========   ===========

Basic Income Loss Per Share                                                    $         *   $       .01
                                                                               ===========   ===========

Basic weighted average shares outstanding                                       25,105,458    33,120,920
                                                                               ===========   ===========

*Less than $.01 per share
</TABLE>

                                       2
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
 (UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
                                                                             Three Months Ended March 31,
                                                                              --------------------------
                                                                                    2001       2000
--------------------------------------------------------------------------------------------------------
<S>                                                                            <C>           <C>
Net Income (Loss)                                                              $   (76,787)  $   250,475
                                                                               -----------   -----------

Other Comprehensive Income (Loss):
Unrealized gains (losses) on available-for-sale securities
    net of deferred income tax expense (benefit)
    of $(8,249) in 2001 and $137,585 in 2000                                       (14,046)       39,518

Reclassifications                                                                   54,028      (357,528)
                                                                               -----------   -----------

                                                                                    39,982      (318,010)
                                                                               -----------   -----------

Total Comprehensive Loss                                                       $   (36,805)  $   (67,535)
                                                                               ===========   ===========

</TABLE>

                                       3
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
                                                                              Three Months Ended March 31,
                                                                              ----------------------------
                                                                                  2001            2000
----------------------------------------------------------------------------------------------------------
<S>                                                                           <C>              <C>
Cash Flows From Operating Activities:
Net income (loss)                                                              $   (76,787)  $   250,475
Adjustments to reconcile net cash:
    Depreciation and amortization                                                    2,880         2,880
    Income from equity investments                                                (100,927)     (113,851)
    (Gain) loss on sale of securities                                               85,758      (357,528)
Changes in operating assets and liabilities:
    (Increase) decrease in:
     Accounts receivable                                                                 -       (45,584)
     Advances to related parties                                                   150,000             -
     Prepaid insurance/ expenses                                                     9,552         1,874
     Deposits                                                                            -         3,246
    Increase (decrease) in:
     Accounts payable and accrued liabilities                                        5,806       114,089
     Due to related entities                                                        31,000             -
                                                                               -----------   -----------

Net Cash Provided By (Used In) Operating Activities                                107,282      (144,399)
                                                                               -----------   -----------

Cash Flows From Investing Activities:
    Proceeds from sale of securities                                                30,243       591,190
    Due to former stockholder                                                     (150,000)            -
                                                                               -----------   -----------

Net Cash Provided By (Used In) Investing Activities                               (119,757)      591,190
                                                                               -----------   -----------

Cash Flows From Financing Activities:
    Payments on borrowings                                                               -          (952)
                                                                               -----------   -----------

Net Cash Used In Financing Activities                                                    -          (952)
                                                                               -----------   -----------

Net Increase (Decrease) In Cash                                                    (12,475)      445,839

Cash, beginning of year                                                             17,225       248,491
                                                                               -----------   -----------

Cash, end of year                                                              $     4,750   $   694,330
                                                                               ===========   ===========

Cash paid during the period for:

    Interest                                                                   $         -   $         -
                                                                               ===========   ===========

Non-Cash Investing and Financing Activities:

Payment of commission payable with securities                                  $         -   $   194,101
                                                                               ===========   ===========

Change in unrealized gain (loss) on available for sale
   securities, net of deferred income taxes of $(24,230)
   (2001) and $191,551 (2000)                                                  $   (39,982)  $   318,010
                                                                               ===========   ===========
</TABLE>

                                       4
--------------------------------------------------------------------------------
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
===============================================================================

1.  OPINION OF MANAGEMENT

The preceding financial information has been prepared by the Company pursuant to
the rules and regulations of the Securities and Exchange Commission ("SEC") and,
in the opinion of the Company, includes all normal and recurring adjustments
necessary for a fair statement of the results of each period shown.  Certain
information and footnote disclosures normally included in the financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to SEC rules and regulations.  The
Company believes that the disclosures made are adequate to make the information
presented not misleading.  It is suggested that these financial statements be
read in conjunction with the Company's Annual Report on Form 10-KSB for the year
ended December 31, 2000.


2.  RESTRUCTURE OF OM OPERATING, L.L.C. AND RIVER PORT TRUCK STOP, LLC

Effective April 15, 1998, the Company and Donald I. Williams ("Williams")
entered into Amendment No. One (the "Amendment") to the Operating Agreement (the
"Operating Agreement") of Operator to effect a restructuring of Operator which
the Company believed effectively addressed certain preliminary questions and
concerns raised by the Louisiana Gaming Control Board ("Gaming Control Board")
and the Video Gaming Division of the Gaming Enforcement Section of the Office of
State Police within the Department of Public Safety and Corrections (the
"Division") in their review of Operator's application for renewal of its license
to operate video poker casinos.  The Company elected to voluntarily effect the
restructure of Operator even though the Gaming Control Board had not made a
final determination whether Operator's existing structure satisfied the
Louisiana residency requirements of the Louisiana Video Draw Poker Devices
Control Law and the Rules and Regulations promulgated thereunder (the "Louisiana
Act").  However, after the Company presented the Amendment and related documents
to the Division, the Company had a meeting on November 13, 1998 with the
Division, wherein the Division expressed serious concerns and doubts that the
Amendment would satisfy the Louisiana Act and indicated the Division would
recommend that Operator's license to operate video poker casinos in Louisiana
not be renewed, unless various changes were implemented to comply with the
Louisiana Act.  Among the concerns expressed by the Division were the 20% gross
income allocation to the Company under the Operating Agreement and its
contribution, pursuant to the Amendment, by the Company to Operator for
additional interests in Operator which were then assigned to Williams in
exchange for a $4 million nonrecourse note (the "Note"), in addition to certain
other aspects of Amendment No. One and the related documents.  Rather than risk
loss of the Operator's license, the Company entered into further amendments to
the Operating Agreement and various documents put into place in conjunction with
the Amendment, and agreed to transfer 50% of its remaining Louisiana gaming
interest (including 50% of its interest in Operator, RPLLC and the Gold Rush
Truck Stop) to certain former holders of Class A Preferred Stock of the Company
and certain related persons and entities in exchange for mutual releases and
settlements, dismissal of pending litigation and cancellation of debentures,
accrued dividends and Common Stock of the Company ("Common Stock").  The Company
believed the further restructuring of Operator effectively addressed the
concerns raised by the Division.



                                       5
================================================================================
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
================================================================================


2.  RESTRUCTURE OF OM OPERATING, L.L.C. AND RIVER PORT TRUCK STOP, LLC
(CONTINUED)

On September 28, 2000, Operator's license was renewed by the Division and Gaming
Control Board.

     As part of the further restructure of Operator, the Company entered into a
Release and Settlement Agreement (the "Settlement Agreement") with, among
others, Williams and ten former holders of Class A Preferred Stock of the
Company (the "North Louisiana Group") on February 2, 1999, but to become
automatically effective as of March 31, 1999.  At February 2, 1999, the North
Louisiana Group owned 5,614,632 shares of Common Stock (representing
approximately 13.4% of the issued and outstanding shares of Common Stock) and
were owed $306,959.61 in original principal amount of subordinated debentures,
and were owed accrued dividends of $255,072 accrued on the Class A Preferred
Stock prior to its conversion to Common Stock.  As part of the Settlement
Agreement and pursuant to related documents executed in connection therewith,
the North Louisiana Group agreed, among other things, to (i) dismiss with
prejudice its pending lawsuit against the Company for the payment of accrued
dividends and agreed to cancel all accrued dividends payable to the North
Louisiana Group; (ii) mark their subordinated debentures "canceled" and return
them to the Company and cancel all principal and accrued interest thereunder;
(iii) return to the Company for cancellation of 5,614,632 shares of Common Stock
owned by the North Louisiana Group; (iv) be responsible on a 50/50 basis with
the Company for any funds expended in settlement with any other former holders
of Class A Preferred Stock which the Company may desire to pursue; (v) assume
50% of the debt owed by the Company, to Regions Bank, Springhill Branch,
formerly known as Springhill Bank & Trust Company, relating to the Company's
Gold Rush Truck Stop; and (vi) release all claims, known or unknown, which the
North Louisiana Group might have against, among others, the Company,
International Tours, Inc. ("International") and the officers and directors of
the Company as of the date of the Settlement Agreement.  In return, the Company
(a) released all claims it might have, known or unknown, against, among others,
the North Louisiana Group as of the date of the Settlement Agreement; (b) agreed
to assign to 146LLC, on behalf of the North Louisiana Group, a 24.5% interest in
Operator and a 25% interest in RPLLC; and (c) agreed to assign to 146LLC, on
behalf of the North Louisiana Group, 50% of the Company's ownership of the Gold
Rush Truck Stop.

Under the Settlement Agreement, Williams agreed to release all claims he might
have, known or unknown, against, among others, the Company, International, the
officers and directors of the Company and the North Louisiana Group as of the
date of the Settlement Agreement, and the Company agreed to release all claims
the Company might have, known or unknown, against, among others, Williams as of
the date of the Settlement Agreement.  Williams also agreed, among other things,
to (i) mark his subordinated debenture in the original principal amount of
$93,900 "canceled" and return it to the Company and cancel all principal and
accrued interest thereunder; (ii) return to the Company for cancellation 824,000
shares of Common Stock owned by Williams, 1,279,000 shares of Common Stock owned
by P.& J.



                                       6
================================================================================
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
===============================================================================


2.  RESTRUCTURE OF OM OPERATING, L.L.C. AND RIVER PORT TRUCK STOP, LLC
(CONTINUED)

Williams, L.L.C. (an affiliated entity) and 450,000 shares of Common Stock owned
by New Orleans Video Poker Company, Inc. (an affiliated entity), an aggregate of
2,553,000 shares (representing approximately 6.1% of the issued and outstanding
shares of Common Stock) (iii) cancel the $78,000 of accrued dividends payable to
Williams accrued on the Class A Preferred Stock prior to its conversion to
Common Stock; and (iv) pay to the Company certain amounts which could aggregate
between $150,000 and $300,000 over six years in conjunction with the possible
additional settlements by the Company with other former holders of Class A
Preferred Stock which the Company may desire to pursue.  The Company and
Williams also entered into amendments to several other existing agreements in
connection with the Settlement Agreement as described in the following
paragraphs.

The Company and Williams entered into a Second Amendment (the "Second
Amendment") to Operator's Operating Agreement, effective March 31, 1999.  The
Second Amendment operates to amend the Operating Agreement, as amended by the
Amendment, to delete all references to the Note and to the contribution of the
20% special gross income allocation so that neither provision shall ever have
been deemed to have existed and neither provision shall have ever been of any
force or effect.  As a result, the Note is deemed to never have existed and the
20% special gross income allocation was not deemed to have been contributed by
the Company for additional ownership interest in Operator.  Under the Second
Amendment, the Operating Agreement was amended to terminate, and to delete all
references to, the 20% gross income allocation after March 31, 1999 and no
further allocation or distributions will be made to the Company pursuant to such
20% special gross income allocation.  Thereafter, distributions will be made in
accordance with capital accounts and the Sharing Ratios of the Members, which
will be 51% to Williams, 24.5% to the Company and 24.5% to one or more members
of the North Louisiana Group; provided, however, Williams is entitled under the
Second Amendment to distribution of the initial $4,166 to be distributed per
month up to a maximum of $50,000 per year, which distributions are to be
credited against any other distributions to Williams during such year.  Pursuant
to the Second amendment, Operator will no longer be managed by a manager and,
instead, will be managed by the members, who shall take actions by the vote of
members owning at least 65% of the Sharing Ratios, except for certain enumerated
major decisions which require unanimous vote.  Related agreements were also
entered into effective as of March 31, 1999 canceling the Note and the Company's
security interest in the ownership interests of Williams securing the Note.

The Company and Operator also entered into a Termination of Consulting and
Administrative Agreement (the "Termination") effective March 31, 1999.  The
Termination has the effect of terminating the Consulting and Administrative
Agreement entered into between the Company and Operator on April 15, 1998 (the
"Consulting Agreement') pursuant to which the Company agreed to provide
consulting and administrative services relating to the daily management of each
of Operator's video poker casino, and pursuant to which the Company received a
fee of $400,000 per year for rendering such services, reduced by $50,000 for
each existing video poker casino Operator loses the right to operate, and
increased by $50,000 for each new video poker casino operated by Operator during
the term of the Consulting Agreement.





                                       7
================================================================================
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
================================================================================


2.  RESTRUCTURE OF OM OPERATING, L.L.C. AND RIVER PORT TRUCK STOP, LLC
(CONTINUED)

Williams and Operator also entered into a Second Amendment to Employment
Agreement (the "Employment Amendment") effective March 31, 1999 which amends the
Employment Agreement dated April 15, 1998 pursuant to which Williams received an
annual salary of $250,000, was eligible to participate in any employee benefit
plans of Operator, was furnished the use of a company automobile and was
reimbursed for expenses incurred on behalf of Operator during the course of his
employment.  Under the Employment Amendment, Williams will receive an annual
salary of $100,000 and will continue to be eligible to participate in any
employee benefit plans of Operator, but will no longer be furnished the use of a
company automobile or be reimbursed for expenses.  Under the Employment
Agreement, as amended by the Employment Amendment, the Employment Agreement
terminates on March 31, 2004.

As part of the Settlement Agreement, the Company and Operator have modified the
terms of the lease of the Gold Rush Truck Stop by Ozdon Investments, Inc.
("Ozdon") to Operator.  Ozdon and Operator have entered into a Lease Agreement
(the "Lease") effective March 31, 1999 for an initial term of nine months and
thereafter to be a month-to-month lease until terminated by either party, with
or without cause, on 60 days' prior written notice.  Ozdon will be responsible
for major repairs and Operator will be responsible for nonmajor repairs and
maintenance, and Operator will pay a rental of $33,333.33 per month for the term
of the Lease.  The Company, Ozdon and Williams also mutually agreed to terminate
the right of first refusal previously granted to Williams to purchase the land
and buildings constituting the Gold Rush Truck Stop, or any portion thereof, if
Ozdon proposed to sell them to a third party.  In conjunction with the Lease,
the Company has agreed to be solely responsible for the indebtedness to Regents
Bank, Springhill Branch, formerly known as Springhill Bank & Trust Company,
which is secured by a mortgage on the Gold Rush Truck Stop.  As of March 31,
2001, the outstanding principal balance of such indebtedness was approximately
$71,545.

Pursuant to the Second Amendment, the parties agreed to delete the requirement
that all video poker gaming opportunities within Louisiana that either party
desires to pursue must first be presented to Operator for its review and
determination whether it desires to pursue such opportunity.  Effective March
31, 1999, all parties will be free to pursue any video poker gaming
opportunities they may desire without first offering the opportunity to Operator
or any other member.  Likewise, Williams is no longer entitled to receive a
finder's fee of $50,000 for each opportunity brought by him to Operator which is
consummated by Operator.

As part of the Settlement Agreement, Williams and the Company also agreed that
to the extent any of the truck stop, convenience store, restaurant or gaming
interest that are a part of King's Lucky Lady, Pelican Palace, Lucky Longhorn,
The Diamond Jubilee or the Video Poker Tavern Route are held or operated in the
name of the Company, effective March 31, 1999 they were deemed to be in the name
of and operated by Operator.



                                       8
================================================================================
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED  MARCH 31, 2001 AND 2000
================================================================================


2.  RESTRUCTURE OF OM OPERATING, L.L.C. AND RIVER PORT TRUCK STOP, LLC
(CONTINUED)

Pursuant to the Settlement Agreement, the Operating Agreement of RPLLC (the
"River Port Operating Agreement") was also amended to provide that it shall be
managed by the members in the same manner as described above for Operator under
its amended Operating Agreement, and to provide that Williams will own 50% of
the membership interest and Sharing Ratios, and the Company will own 25% and one
or more members of the North Louisiana Group will own the remaining 25%.  Other
conforming changes were made to make the River Port Operating Agreement
consistent with the Operating Agreement of Operator, as amended by the Second
Amendment.  The amendments to the River Port Operating Agreement also become
effective March 31, 1999.

The Second Amendment and amendment to the River Port Operating Agreement, which
were effective midnight March 31, 1999, constitute a transfer of ownership
interest and control in all of the Company's gaming operations.  As of April 1,
1999, ownership of OM, RPLLC and the Gold Rush Truck Stop are as follows:
<TABLE>
<CAPTION>
                                                 North Louisiana
                                 Company               Group               Williams             Total
                             --------------    ---------------------  -----------------  -----------------
<S>                          <C>             <C>                      <C>                <C>
OM                                    24.5%                    24.5%              51.0%             100.0%
RPLLC                                 25.0%                    25.0%              50.0%             100.0%
Ozdon                                 50.0%                    50.0%                 -              100.0%
</TABLE>

Therefore, the Company has recorded its investment in OM, RPLLC and Ozdon under
the equity method from April 1, 1999.

Prior to the effective date of the Second Amendment and amendment to the River
Port Operating Agreement, the application of the existing agreements resulted in
the Company controlling the gaming operations and 100% of the net gaming income
being allocated to the Company and 0% to Williams.  Therefore, the financial
statements of OM, RPLLC and Ozdon were consolidated with the Company through
March 31, 1999.

On March 27, 2000, the other two members of Operator and RPLLC purportedly voted
to merge seperate limited liability companies into each of Operator and RPLLC
and buyout the Company's interest in each for $375,000 and $50,000,
respectively.  The Articles of Organization of each of Operator and RPLLC
require that a member's interest may not be changed and the Articles of
Organization may not be amended without unanimous consent of all members.  The
Company voted against the purported mergers and buyout and subsequently filed a
lawsuit to nullify the mergers and buyout. The Company has vigorously pursued
its rights, sought a judicial declaration nullifying the purported mergers of
both Operator and River Port LLC, and sought damages for these and other
breaches of fiduciary duty.  The Company has also entertained discussions and
negotiations concerning a possible settlement of the litigation.  Effective as
of January 5, 2001, the Company entered into a 60 day term sheet (the "Term
Sheet") with the other parties to the lawsuits, together with certain related
parties thereof (collectively, the "OMO Group").  The Company received a $50,000
non-refundable payment in connection with the Term Sheet.  On April 23, 2001,
the Term Sheet was amended to extend the negotiation date another 60 days for an
additional $100,000 non-refundable payment.



                                       9
================================================================================
<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED  MARCH 31, 2001 AND 2000
================================================================================


2.  RESTRUCTURE OF OM OPERATING, L.L.C. AND RIVER PORT TRUCK STOP, LLC
(CONTINUED)

Under the terms of the amended Term Sheet, the Company and the OMO Group have
agreed to settle the foregoing litigation and enter into mutual releases of
claims, subject to certain conditions that must be satisfied prior to such
settlement becoming effective.  The amended Term Sheet provides that the
settlement would not become effective unless definitive, binding agreements
mutually acceptable to all parties (the "Definitive Agreements") were entered
into on or before May 5, 2001, and the closing to occur on or before June 5,
2001. Definitive Agreements were not executed prior to such date, but are
continuing to be negotiated as of the date of this Form 10-QSB and the Company
anticipates that Definitive Agreements will ultimately be agreed upon and
executed, although there can be no assurance.  If the Definitive Agreements are
entered into, the closing and final effectiveness of the settlement will be
subject to the Company filing an Information Statement with the Securities and
Exchange Commission and distributing the Information Statement to its
stockholders describing the settlement and related sales of assets, described
below, by the Company pursuant to the Definitive Agreements.  International
Tours, Inc. ("International") has agreed to vote its common stock in favor of
the approval of the Definitive Agreements and the sale of the assets described
below, and, therefore, the approval and sale are assured.  In addition to mutual
releases of all parties, the Definitive Agreements will provide for the sale by
the Company of (i) all of the Company's interest in Operator, (ii) all of the
Company's interest in River Port Truck Stop, LLC ("River Port LLC"), and (iii)
the Company's 50% ownership interest in Ozdon Investments, Inc. ("Ozdon").  The
purchase price for the sale of the foregoing assets by the Company shall be
equal to $2.3 million, payable $800,000 in cash and $1.5 million in the form of
a promissory note payable in 60 monthly installments of principal and interest;
provided, the cash potion of the purchase price will be reduced by an amount
equal to the sum of all liabilities of Ozdon in excess of $125,000.  The
non-refundable payments of $150,000 will be applied against the cash portion of
the purchase price. The promissory note will be personally guaranteed by Weaver,
146 LLC, Williams, Operator, River Port LLC, Ozdon and 167 Truck Stop, L.L.C.
and will be secured by a security interest in 49% of the membership interests of
Operator. The Company will also be indemnified against any loss due to its
guaranty of the obligations of River Port LLC until it is released from such
guaranty. The Definitive Agreements will also include a noncompetition agreement
pursuant to which the Company will agree not to compete for a period of two
years after the closing of the Definitive Agreements in the ownership, operation
or management of truck stops in any of the Parishes in the State of Louisiana in
which Operator or River Port LLC currently own or operate truck stops.

          The Company and the other parties to these lawsuits have agreed to
postpone the lawsuits pending negotiation and execution of the Definitive
Agreements.  If the parties are unable to ultimately agree upon and execute the
Definitive Agreements, the settlement will not be effective and the three
lawsuits will most likely proceed.



                                       10
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<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED  MARCH 31, 2001 AND 2000
================================================================================


2.  RESTRUCTURE OF OM OPERATING, L.L.C. AND RIVER PORT TRUCK STOP, LLC
(CONTINUED)

          The purported mergers, the pending lawsuits and the possible
settlement and sale of the Company's assets pursuant to such settlement should
be considered in the review of the remainder of this Form 10-QSB.  The
discussion of Operator, River Port LLC and Ozdon, and the Company's ownership
interests in them, contained in the remainder of this Form 10-QSB assumes that
the Definitive Agreements will not be executed, the litigation will continue,
the purported mergers will be set aside and that the Company's ownership
interests will be reinstated.  The final decision in this regard will not be
known until it is known that the Definitive Agreements are not going to be
executed and then not until the courts render final judgments in the lawsuits.

          If, on the other hand, the Definitive Agreements are executed and the
closing occurs, the Company will sell all of its gaming assets in Louisiana for
the $2.3 million purchase price discussed above.  In such event, the Company
plans to pursue additional opportunities and developments in other industries
and other businesses and to continue as an ongoing business concern.















                                       11
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<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
================================================================================


2.  RESTRUCTURE OF OM OPERATING, L.L.C. AND RIVER PORT TRUCK STOP, LLC
(CONTINUED)

The following is a combined condensed unaudited balance sheet for the Operator,
RPLLC and Ozdon as of March 31, 2001 and the combined condensed unaudited
statement of income for the three months then ended.


                            CONDENSED BALANCE SHEET
                                  (UNAUDITED)
                                 March 31, 2001
<TABLE>
<CAPTION>
Assets

<S>                                                                   <C>
Current assets                                                                $1,353,000
Fixed assets, net                                                              3,276,000
Other assets                                                                     344,000
                                                                              ----------

                                                                              $4,973,000
                                                                              ==========
Liabilities and Equity

Current liabilities                                                           $1,117,000
Long-term liabilities                                                          2,090,000
                                                                              ----------

                                                                               3,207,000

Equity                                                                         1,766,000
                                                                              ----------

                                                                              $4,973,000
                                                                              ==========
</TABLE>


                         CONDENSED STATEMENT OF INCOME
                                  (UNAUDITED)
                       Three Months Ended March 31, 2001

<TABLE>
<CAPTION>

<S>                                                                      <C>
Revenues                                                                        $4,901,000
Cost of revenues                                                                 3,260,000
                                                                                ----------

Gross profit                                                                     1,641,000

General and administrative                                                       1,226,000
                                                                                ----------

Operating profit                                                                   415,000

Other                                                                              (34,000)
Taxes                                                                              (33,000)
                                                                                ----------

Net Income                                                                      $  348,000
                                                                                ==========
</TABLE>


                                       12
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<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 2001 AND 2000
===============================================================================


3.  INVESTMENT SECURITIES

Investment securities, classified as available-for-sale, are summarized as
follows at March 31, 2001:


       Marketable equity securities, at cost              $ 48,655
       Unrealized losses                                   (19,191)
       Unrealized gains                                      1,000
                                                          --------

       Marketable equity securities, fair market value    $ 30,464
                                                          ========

The marketable equity securities are pledged as collateral on a note payable.

4.  SUBSEQUENT EVENT

On April 26, 2001, the Company entered into an option agreement with Energy
Transfer Group, LLC ("ETG"). The Company paid ETG $250,000 as the option price
for the option to acquire ETG Communications, Inc. ("Communications") from ETG.
If the Company exercises the option, it will acquire Communications in exchange
for Common Stock of the Company equal to 51% of the outstanding shares following
the issuance of shares to ETG. The Company has also agreed to loan funds to
Communications for working capital until August 1, 2001, the date on which the
Company's option expires. Communications is in the business of marketing and
providing Internet service to residential and commercial customers in rural
markets through ETG's relationships with rural electric cooperatives across
the United States.



                                       13
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<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
==============================================================================


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

LIQUIDITY AND CAPITAL RESOURCES

General:  As noted in Note 2 of the Notes to Consolidated Financial Statements,
the Company has entered into a Term Sheet to settle three lawsuits, subject to
negotiation and execution of Definitive Agreements. If the Definitive Agreements
are executed, the Company will sell all of its gaming assets in Louisiana for
$2.3 million, of which $800,000 will be paid in cash (less $150,000 already paid
to the Company) and $1.5 million will be paid by a promissory note payable in 20
quarterly installments of principal and interest. The Company is reviewing other
businesses and acquisition opportunities and plans to use the proceeds from such
sale to fund other business opportunities. See footnote 4 to the financial
statements for a discussion of an option held by the Company to acquire an
Internet service company. The Company expects that the Definitive Agreements
will be ultimately negotiated and executed and that the settlement and sale of
assets pursuant to the Term Sheet will be effected. However, there can be no
assurance.

     The Company will seek to meet its long-term liquidity needs primarily
through cash flow from equity investments, operations, and additional borrowings
from the Company's traditional lending sources.  While the Company believes it
will be able to generate and obtain the necessary capital to meet such needs,
there can be no assurance that all of such capital will be available on terms
acceptable to the Company, which could delay or cause the Company to postpone
certain planned activities.

     General Condition:  The Company ended the quarter with $4,750 in cash and
other current assets of $299,918. Other current assets consists of a receivable
from a related entity of $6,900, prepaid expenses of $59,248 and a deferred tax
asset of $233,770.  Total liabilities were $978,606 at March 31, 2001.  Current
liabilities of $538,606 consist of accounts payable and accrued liabilities of
$89,306, current portion of long-term notes payable of $273,297, payables to
related parties of $161,000 and preferred stock dividends payable of $15,003.
The Company's current liabilities decreased $85,694 from $624,300 at December
31, 2000.  This decrease was comprised primarily of the payoff of $150,000 to a
former stockholder, offset by an increase in current portion of long-term debt,
accounts payable and payables to related entities.

     Competition is intense for the business of gaming patrons in Louisiana and
Mississippi.  It is expected that profit margins may continue to be adversely
affected as a result of such competition and that various gaming establishments
may be forced to close because they cannot compete effectively at such reduced
margins.  The Company believes Ozdon, Operator and River Port LLC will be able
to maintain a competitive position if they are able to carefully manage expenses
and cash flow.  However, there can be no assurance in this regard and the
Company has no control over such management by Operator or River Port LLC.
Ozdon and Operator were parties to a month-to-month lease pursuant to which
Ozdon leased the Gold Rush truck stop and casino to Operator.  Ozdon terminated
the lease, but pursuant to the Term Sheet, Ozdon is allowing Operator to
continue to operate the truck stop and casino at the Company's discretion.



                                       14
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<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
================================================================================


RESULTS OF OPERATIONS
Comparison of Three Months Ended March 31, 2001 to Three Months Ended March 31,
-------------------------------------------------------------------------------
2000
----

Operating Income (Loss)
-----------------------

The Company recorded a loss from operations of $126,318 during the three months
ended March 31, 2001 compared to a loss from operations of $228,046 for the
three months ended March 31, 2000.  The decline in operating loss is due to the
Company's reduction in overhead expenses.

Income from Equity Investments
------------------------------

As discussed in Note 2, the gaming and truck stop operations recorded gross
profit for the three months ended March 31, 2001 of approximately $1,641,000.
In addition, the gaming and truck stops incurred approximately $1,226,000 of
general and administrative expenses and $34,000 of other expenses during the
same three months.  The result was net income from gaming and truck stop
operations of $1,348,000 of which the Company's share was $100,927 (including
Ozdon).  The Company's share of income for the three months ended March 31, 2000
was $113,851 on income from gaming and truck stop operations of approximately
$418,000.  The decrease in income from gaming and truck stop operations was
attributable to an increase in overhead costs as RPLLC's casino opened in the
second half of 2000.

As noted in Note 2 of the Notes to Consolidated Financial Statements
(Unaudited), the other two members of Operator and RPLLC have purportedly voted
in favor of a merger resulting in the termination of the Company's interests in
Operator and RPLLC for a buyout of $375,000 and $50,000, respectively, and the
Company has filed a lawsuit seeking to nullify the purported mergers and
buyouts, among other relief.  Effective as of January 5, 2001, the Company
entered into a Term Sheet with the other parties to the lawsuits, together with
certain related parties of the OMO Group.  Under the terms of the Term Sheet,
the Company and the OMO Group have agreed to settle the foregoing litigation and
enter into mutual releases of claims, subject to certain conditions that must be
satisfied prior to such settlement becoming effective.  The Term Sheet provides
that the settlement would not become effective unless definitive, binding
agreements mutually acceptable to all parties were entered into.

Gain on Sale of Investments
---------------------------

During the three months ended March 31, 2001, the Company sold Travelbyus.com
common stock resulting in a loss of $85,758.  During the three months ended
March 31, 2000, the Company sold Travelbyus.com common stock resulting in a gain
of $357,528.  The Company's remaining 75,000 shares of Travelbyus.com stock are
restricted as collateral on debt.




                                       15
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<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
================================================================================


Other Income
------------

During the three months ended March 31, 2001, the Company recognized $50,000
related to the initial non-refundable fee received in connection with the Term
Sheet.  During the three month ended March 31, 2000 the Company had other income
of $25,555 primarily related to interest income.


Forward Looking Statements
--------------------------

Statements that are not historical facts included in this Form 10-QSB are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties that could
cause actual results to differ from projected results.  Such statements address
activities, events or developments that the Company expects, believes, projects,
intends or anticipates will or may occur, including such matters as future
capital, debt restructuring, the possible effects of anti-gaming sentiment, the
restructuring of Operator and RPLLC maintaining or increasing fuel sales,
compliance with other gaming law requirements, maintaining a competitive
position in the Company's market, pending legal proceedings, new lease and other
contractual arrangements, business strategies, expansion results to differ
materially ("Cautionary Disclosures") are described throughout this Form 10-
QSB. Cautionary disclosures include, among others: general economic conditions,
the Company's ability to find, acquire, market, develop, and produce new
properties, the strength and financial resources of the Company's competitors,
anti-gaming sentiment, labor relations, availability and cost of material and
equipment, the results of debt restructuring efforts, regulatory developments
and compliance, pending legal proceedings and possible new lease and other
contractual arrangements. All written and oral forward-looking statements
attributable to the Company are expressly qualified in their entirety by the
Cautionary Disclosures. The Company disclaims any obligation to update or revise
any forward-looking statement to reflect events or circumstances occurring
hereafter or to reflect the occurrence of anticipated or unanticipated events.



                                       16
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<PAGE>

NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
================================================================================


PART II  OTHER INFORMATION

ITEM 1  LEGAL PROCEEDINGS

Arlington Farms, Inc., et al v. North American Gaming and Entertainment
Corporation, et al, Civil Action No. 00-106-C-M2, United States District Court,
Middle District of Louisiana.  This suit represents a suit by certain of the
plaintiffs in the Harry Woodall, et al v. North American Gaming and
Entertainment Corporation lawsuit, which was dismissed as part of the Settlement
Agreement with the North Louisiana Group.  These plaintiffs have sued the
Company seeking specific performance under the Settlement Agreement to require
the Company, among other things, to deliver various instruments of ownership
reflecting the ownership interests of the North Louisiana Group in Operator,
River Port LLC and Ozdon and to declare that the effective date of the transfer
was December 17, 1998 rather than March 31, 1999, and for unspecified violations
of Rule 10b-5 promulgated under the Securities Act of 1933.  The suit also
involves a claim against E.H. Hawes, II, the President and Chief Executive
Officer of the Company, and a nonaffiliated third party to set aside a second
lien on the Gold Rush granted by the Company to secure the personal guaranty of
Mr. Hawes and such thirty party guaranteeing the indebtedness of River Port LLC
incurred in connection with the construction of River Port.  The Company and the
other parties to this litigation have agreed to postpone it pending negotiation
and execution of the Definitive Agreements pursuant to the Term Sheet.


ITEMS 2, 3, 4 AND 5 ARE OMMITED FROM THIS REPORT AS INAPPLICABLE


ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K

(a)  The following documents are filed as part of this Quarterly Report on Form
     10-QSB:

Exhibit
Number     Description of Exhibits
------     -----------------------

(a)        The following exhibits are filed as part of this Form 10-QSB pursuant
           to Item 601 of Regulation S-B:

3.1.1      Certificate of Incorporation of the Company, as amended, filed as
           Exhibit 3.1 to the Company's Annual Report on Form 10-K for the
           fiscal year ended December 31, 1986 (the "1986 Form 10-K"), and
           incorporated herein by reference.

3.1.2      Certificate of Amendment of Certificate of Incorporation of the
           Company dated April 18, 1994, filed as Exhibit 3.1.8 to the Company's
           Annual Report on Form 10-K for the fiscal year ended December 31,
           1993 (the "1993 Form 10-K"), and incorporated herein by reference.

3.1.3      Certificate of Amendment of Certificate of Incorporation of the
           Company effecting one-for-three reverse stock split filed as Exhibit
           3.1 to the Company's Current Report on Form 8-K dated October 17,
           1994, and incorporated herein by reference.




                                       17
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NORTH AMERICAN GAMING AND ENTERTAINMENT
 CORPORATION AND SUBSIDIARIES
================================================================================


3.1.4      Certificate of Amendment of Certificate of Incorporation of the
           Company effecting name change, increase of authorized shares,
           authorization of Class A preferred stock and stock ownership
           limitations filed as Exhibit 3.2 to the Company's Current Report on
           Form 8-K dated October 17, 1994, and incorporated herein by
           reference.

3.1.5      Form of "Certificate of Designation, Preferences and Rights of Series
           B Convertible Preferred Stock" creating the Series B Preferred Stock
           filed as Exhibit 10.1.4 to the Company's Current Report on Form 8-K
           dated June 10, 1996, and incorporated herein by reference.

3.1.6      Certificate of Amendment of Certificate of Incorporation of the
           Company increasing the number of authorized shares of Common Stock to
           100,000,000 shares filed as Exhibit 2.1.6 to the Company's Quarterly
           Report on Form 10-QSB for the second quarter of 1998, and
           incorporated herein by reference.

3.2        Amended and Restated Bylaws of the Company filed as Exhibit 3.2 to
           the Company's Quarterly Report on Form 10-QSB for the third quarter
           of 1998, and incorporated herein by reference.


(b)  Reports on Form 8-K.

      None.


In accordance with the requirement of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                         NORTH AMERICAN GAMING AND
                                         ENTERTAINMENT CORPORATION
                                         (Registrant)



                                         By: /s/ Ed Hawes
                                             Chairman of the Board and
                                             Chief Executive Officer


Date:  May 21, 2001



                                       18
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