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

                                   Form 1O-QSB

                                   (check one)

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

                  For the three months ended December 31, 2000

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

                        Commission File Number 000-30486

                   ADVANCED COMMUNICATIONS TECHNOLOGIES, INC.
                   ------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                                     Florida
                                     -------
                          (State or other jurisdiction
                        of incorporation or organization)

                                   33-0929781
                                   ----------
                        (IRS Employer Identification No.)

               19200 Von Karman Ave., Suite 500, Irvine, CA 92612
               --------------------------------------------------
                    (Address of principal executive offices)

                                 (949) 622-5566
                                 --------------
                         (Registrant's telephone number)

Check  whether  the  registrant  (1) filed all  reports  required to be filed by
Section  13 or 15(d) of the  Exchange  Act during the past 3 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 [ ]

   As of December 31,2000, 89,239,218 shares of the registrant's no par value
                    common stock were issued and outstanding

            Transmittal Small Business Disclosure Format (check one):
                                 Yes [ ] No [X]


<PAGE>

PART I-FINANCIAL INFORMATION

ITEM 1. Consolidated Financial Statements

      Consolidated Balance Sheets as of December 31, 2000 and June 30, 2000

      Consolidated  Statement of Operations  for the three months ended December
      31, 2000 and  December  31, 1999  (Restated)  and for the six months ended
      December 31, 2000 and December 31, 1999 (Restated)

      Consolidated  Statement  of  Changes in  Stockholders'  Equity for the six
      months ended December 31, 2000 and December 31, 1999

      Consolidated Statement of Cash Flows for the six months ended December 31,
      2000 and December 31, 1999 (Restated)

Notes to Unaudited Consolidated Financial Statements

ITEM 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

PART II-OTHER INFORMATION

ITEM 2. Changes in Securities

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

ITEM 4. Submission of Matters to a Vote of Security Holders

ITEM 6. Subsequent Events, Exhibits and Reports on Form 8-K


<PAGE>

            ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                     DECEMBER 31, 2000             JUNE 30, 2000
                                                                        (UNAUDITED)                -------------
                                                                        -----------
<S>                                                                    <C>                           <C>
ASSETS:

CURRENT ASSETS
     Cash                                                              $    15,028                   $    30,154
     Marketable securities                                                   1,950                         6,825
     Prepaid expenses                                                           --                        46,118
                                                                       -----------                   -----------

TOTAL CURRENT ASSETS                                                        16,978                        83,097
                                                                       -----------                   -----------

PROPERTY & EQUIPMENT - NET                                                  22,768                        16,188
                                                                       -----------                   -----------
OTHER ASSETS
     Due from affiliate                                                    562,233                       552,125
     Investment in affiliate                                            19,026,892                    19,264,182
     Deposits                                                                5,525                        45,525
                                                                       -----------                   -----------

TOTAL OTHER ASSETS                                                      19,594,650                    19,861,832
                                                                       -----------                   -----------

TOTAL ASSETS                                                           $19,634,396                   $19,961,117
                                                                       ===========                   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY:

LIABILITIES
   CURRENT LIABILITIES
     Accounts payable and accrued compensation                         $   865,396                   $   442,520
     Deferred revenue                                                           --                        50,000
     Note payable-Grassland                                                108,198                       150,000
     Loan payable to affiliate                                             682,500                       251,500
     Convertible debentures                                                200,750                       613,550
                                                                       -----------                   -----------

TOTAL CURRENT LIABILITIES                                                1,856,844                     1,507,570

LONG-TERM LIABILITIES
     Notes payable-affiliate                                             3,540,000                     7,500,000
                                                                       -----------                   -----------

TOTAL LIABILITIES                                                      $ 5,396,844                     9,007,570
                                                                       -----------                   -----------

STOCKHOLDERS' EQUITY
     Common stock, no par value, 100,000,000 shares
       authorized, 89,239,218 and 82,227,280 shares
       issued and outstanding, respectively                             20,936,613                    16,865,441
     Accumulated deficit                                                (6,574,261)                   (5,416,969)
     Accumulated other comprehensive loss                                 (124,800)                     (119,925)
     Less:  Common stock advances                                               --                      (375,000)
                                                                       -----------                   ------------

TOTAL STOCKHOLDERS' EQUITY                                             $14,237,552                   $10,953,547
                                                                       -----------                   -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $19,634,396                   $19,961,117
                                                                       ===========                   ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       1
<PAGE>

            ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               FOR THE THREE MONTHS                   FOR THE SIX MONTHS
                                                                      ENDED                                  ENDED
                                                          -------------------------------       -------------------------------
                                                                             DECEMBER 31,                          DECEMBER 31,
                                                          DECEMBER 31,          1999            DECEMBER 31,          1999
                                                             2000            (RESTATED)            2000            (RESTATED)
                                                         ------------       ------------       ------------       ------------

<S>                                                      <C>                <C>                <C>                <C>
TELEPHONE NETWORK REVENUE                                $     13,261       $         --       $     50,000       $         --
COST OF REVENUES                                              (12,528)                --            (57,310)                --
                                                         ------------       ------------       ------------       ------------

GROSS PROFIT (LOSS)                                               733                 --             (7,310)                --
                                                         ------------       ------------       ------------       ------------

OPERATING EXPENSES
     Consulting fees                                     $    153,000       $     81,396       $    306,125       $    208,812
     Depreciation and amortization                              1,000             33,500              2,000             34,500
     Professional fees                                        176,279            103,804            175,981            124,223
     Other selling, general &
       administrative expenses                                190,425            100,292            305,466            154,874
     Stock-based compensation                                 133,000            485,650            146,120            981,288
                                                         ------------       ------------       ------------       ------------

TOTAL OPERATING EXPENSES                                      653,704            804,642            935,692          1,503,697
                                                         ------------       ------------       ------------       ------------

LOSS FROM OPERATIONS                                         (652,971)          (804,642)          (943,002)        (1,503,697)
                                                         ------------       ------------       ------------       ------------

OTHER INCOME/(EXPENSE)
     Interest expense                                              --             (7,590)                --           (665,180)
     Loss from investment in affiliate                       (115,153)                --           (237,290)
     Other income                                                  --                 --                 --                 --
                                                         ------------       ------------       ------------       ------------

TOTAL OTHER INCOME/(EXPENSE)                                 (115,153)            (7,590)          (237,290)          (665,180)
                                                         ------------       ------------       ------------       ------------

LOSS BEFORE EXTRAORDINARY GAINS                              (768,124)          (812,232)        (1,180,292)        (2,168,877)

EXTRAORDINARY GAINS
     Gains on extinguishments of debt                          23,000            121,937             23,000            364,498
                                                         ------------       ------------       ------------       ------------

NET LOSS FROM OPERATIONS                                 $   (745,124)      $   (690,295)      $ (1,157,292)      $ (1,804,379)

OTHER COMPREHENSIVE LOSS, NET OF TAX
     Unrealized loss on marketable securities                  (4,290)            (5,850)            (4,875)           (19,500)
                                                         ------------       ------------       ------------       ------------


COMPREHENSIVE LOSS                                       $   (749,414)      $   (696,145)      $ (1,162,167)      $ (1,823,879)
                                                         ============       ============       ============       ============

Net loss per share-basic and diluted                     $       (.01)      $       (.01)      $       (.01)      $       (.02)
                                                         ============       ============       ============       ============

Weighted average number of shares outstanding
  during the period-basic and diluted                      87,719,218         75,516,709         84,753,575         74,966,098
                                                         ============       ============       ============       ============
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       2
<PAGE>

            ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARY
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
   FOR THE SIX MONTHS ENDED DECEMBER 31, 2000 AND DECEMBER 31, 1999 (RESTATED)

<TABLE>
<CAPTION>
                                                                                        ACCUMULATED
                                                                                           OTHER          COMMON
                                                   COMMON STOCK        ACCUMULATED     COMPREHENSIVE       STOCK
                                          SHARES          AMOUNT         DEFICIT           LOSS           ADVANCES          TOTAL
                                       ------------    ------------    ------------    -------------    ------------    ------------
<S>                                      <C>           <C>             <C>             <C>             <C>             <C>
SIX MONTHS ENDED
  DECEMBER 31, 1999:

BALANCE AT JULY 1, 1999                  73,312,280    $    416,183    $   (672,962)   $    (97,500)   $         --    $   (354,279)

Stock issued for services                 1,735,500         981,288              --              --              --         981,288
Stock issued for office furniture            30,000           9,900              --              --              --           9,900
Stock issued in exchange for debt           600,000         180,000              --              --              --         180,000
Stock issued for acquisitions               500,000         375,000              --              --              --         375,000
Change in unrealized loss on
  securities for sale                            --              --              --         (19,500)             --         (19,500)
Interest on beneficial conversion
  of debentures                                  --         650,000              --              --              --         650,000
Common stock advances                      (500,000)             --              --              --        (375,000)       (375,000)
Net loss for the six months ended
  December 31, 1999                              --    $         --    $ (1,804,379)   $         --    $         --      (1,804,379)
                                       ------------    ------------    ------------    ------------    ------------    ------------

BALANCE AT DECEMBER 31, 1999             75,677,780    $  2,612,371    $ (2,477,341)   $   (117,000)   $   (375,000)       (356,970)
                                       ============    ============    ============    ============    ============    ============

BALANCE AT JULY 1, 2000                  82,227,280      16,865,441      (5,416,969)       (119,925)       (375,000)     10,953,547

SIX MONTHS ENDED
  DECEMBER 31, 2000:

Stock issued for services                   248,393          54,570              --              --              --          54,570
Stock issued for debt                     5,460,000       3,978,802              --              --              --       3,978,802
Change in unrealized loss
  on securities held for sale                    --              --              --          (4,875)             --          (4,875)
Stock issued on conversion of
  convertible debentures                  1,803,545         412,800              --              --              --         412,800
Common stock retired                       (500,000)       (375,000)             --              --         375,000              --
Net loss for the six months ended
  December 31, 2000                              --              --      (1,157,292)             --              --      (1,157,292)
                                       ------------    ------------    ------------    ------------    ------------    ------------
BALANCE AT DECEMBER 31, 2000             89,239,218    $ 20,936,613    $ (6,574,261)   $   (124,800)   $         --    $ 14,237,552
                                       ============    ============    ============    ============    ============    ============
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       3
<PAGE>

            ADVANCED COMMUNICATIONS TECHNOLOGIES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            FOR THE SIX
                                                                            MONTHS ENDED
                                                                            ------------
                                                                                       DECEMBER
                                                                     DECEMBER          31, 1999
                                                                     31, 2000         (RESTATED)
                                                                     --------         ----------
<S>                                                                <C>               <C>
Cash flows from operating activities
   Net loss                                                        $(1,157,292)      $(1,804,379)
Adjustments to reconcile net loss to net cash used:
  Depreciation and amortization                                          2,000            34,500
  Expenses incurred in exchange for common stock                        54,570           981,288
  Interest for beneficial conversion feature                                --           650,000
  Gain on extinguishment of debt                                       (23,000)         (364,498)
  Loss on minority interest in affiliate                               237,290                --
Changes in operating assets and liabilities:
(Increase) decrease in assets
  Prepaid expense                                                       46,118                --
  Other deposits                                                        40,000           (35,000)
Increase (decrease) in liabilities:
  Accounts payable                                                     280,376            89,189
   Note payable-Grassland                                              (41,802)
   Interest payable                                                         --            15,180
  Accrued compensation                                                 142,500            60,000
  Other liabilities                                                         --           175,500
  Deferred revenue                                                     (50,000)               --
                                                                   -----------       -----------
   Net cash used in operating activities                              (469,240)         (198,220)
                                                                   -----------       -----------

Cash flows from investing activities
  Loan to affiliated company                                           (10,108)         (245,000)
  Purchase of fixed assets                                              (8,580)          (14,335)
  Investment in Kentel LLC                                                  --            (7,000)
   Advances to World IP                                                     --           (45,000)
                                                                   -----------       -----------
  Net cash used in investing activities                                (18,688)         (311,335)
                                                                   -----------       -----------


Cash flows from financing activities
   Loan proceeds from affiliate                                        431,000           (23,500)
    Proceeds from sale of stock                                         41,802                --
   Proceeds from issuance of common stock,
     net of offering costs                                                  --           273,500
   Proceeds from issuance of convertible
     debt, net                                                              --           388,050
                                                                   -----------       -----------
   Net cash provided by financing activities                           472,802           638,050
                                                                   -----------       -----------

Net increase (decrease) in cash                                        (15,126)          128,495

Cash and cash equivalents at beginning of period                        30,154            10,020
                                                                   -----------       -----------

CASH AND CASH EQUIVALENTS AT END
  OF PERIOD                                                        $    15,028       $   138,515
                                                                   ===========       ===========
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       4
<PAGE>

             ADVANCED COMUNICATIONS TECHNOLOGIES, INC AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                        17

Note 1-Principals of Consolidation and Significant Accounting Policies:

The accompanying unaudited consolidated financial statements include the results
of Advanced Communications  Technologies,  Inc. ("ACT" or the "Company") and its
wholly-owned  subsidiary,  Advanced  Global  Communications  Technologies,  Inc.
("AGC"). The accompanying  unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  statements.  Certain  information and footnote  disclosures  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condensed or omitted  pursuant to the quarterly
reporting  rules  of the  Securities  and  Exchange  Commission.  The  financial
statements  reflect  all  adjustments  of a recurring  nature  which are, in the
opinion of  management,  necessary  for the fair  presentation  of the financial
statements.

The financial  statements for the three months ended December 31, 1999 have been
restated  to omit the  results of the  Company's  51%  interest  in World IP and
consolidated  subsidiaries as a result of the Company's  rescission of the World
IP transaction.

Operating  results  for  the  three  months  ended  December  31,  2000  are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  June 30,  2001.  The  interim  financial  statements  should  be read in
conjunction with the audited consolidated financial statements and notes thereto
for the fiscal year ended June 30, 2000 included in the Company's Form 10-KSB as
filed with the Securities and Exchange Commission on October 13, 2000.

Organization

The  Company  was  formed on April 30,  1998 and was  inactive  from its date of
formation  until April 1999 when it acquired  all of the issued and  outstanding
stock of Media Forum International, Inc. ("MFI") in a reverse merger. The merger
was  treated  as  an  acquisition  of  all  of  the  assets  of  MFI  and  as  a
recapitalization  of the Company.  On January 31, 2000, the Company acquired all
of the then issued and outstanding shares of SmartInvestment.com, Inc. ("Smart")
an inactive reporting company for 200,000 shares of restricted common stock. The
Company elected successor issuer status to become a fully reporting company. The
Company  treated the  purchase as a  recapitalization,  and has not recorded any
goodwill  associated with the acquisition.  In July 1999, the Company formed AGC
as a  wholly-owned  subsidiary to conduct its  international  telephone  network
distribution  business.  On April 5,  2000,  the  Company  acquired a 20% equity
ownership interest in Advanced  Communications  Technologies Pty Ltd (Australia)
("ACT-AU"),  an affiliated  entity.  The Company  accounts for its investment in
ACT-AU under the equity method of  accounting.  In July 2000, the Company formed
Australon  USA,  Inc.  ("Australon"),  a Delaware  corporation  owned 50% by the
Company and 50% by Australon  Enterprises Pty, Ltd, an 80% subsidiary of ACT-AU.
In November 2000, the Company formed Advanced Network  Technologies  (USA), Inc.
("ANT"), a Delaware corporation owned 70% by the Company and 30% by ACT-AU. Both
Australon and ANT are presently inactive. The Company intends to account for the
future  results  of  operations  of  Australon  on an equity  basis and ANT on a
consolidated basis.


                                       5
<PAGE>

Marketable Securities

Management  determines the appropriate  classification of its investments at the
time of acquisition and  reevaluates  such  determination  at each balance sheet
date.  Available-for-sale  securities  are  carried at fair market  value,  with
unrealized losses reported as a separate component of stockholders' equity.

Revenue Recognition

Revenue is generally  recognized at the time telephone  service minutes are used
and based on the volume of call service  provided to customers  and processed by
the Company's contractual service providers.

Comprehensive Income (Loss)

The  Company  accounts  for  Comprehensive  Income  (Loss)  under the  Financial
Accounting Standards Board Statements of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income". This statement requires that all components of
comprehensive  income or loss be reported  in the  financial  statements  in the
period in which they are recognized.  The components of comprehensive income for
the   Company   include   unrealized   gains  and   losses,   net  of  tax,   on
available-for-sale marketable securities and are reported as Other Comprehensive
Income (Loss) in the Statement of Operations  and as  Accumulated  Comprehensive
Income (Loss) in Stockholders' Equity.

Concentrations of Credit Risk

The Company  maintains its cash in bank account  deposits,  which at times,  may
exceed federally  insured limits.  The Company has not experienced any losses in
such accounts and believes it is not exposed to any  significant  credit risk on
cash and cash equivalent balances.

Note 2-Due from Affiliate

The  Company  has,  from time to time,  advanced  funds to ACT-AU to support its
research and  development  activities of the SpectruCell  technology.  ACT-AU is
majority  owned by a  principal  stockholder  of the  Company.  The  Company has
advanced  $562,233 and $552,125,  to ACT-AU as of December 31, 2000 and June 30,
2000, respectively.

Note 3-Investment in Affiliate

In April  2000,  the Company  acquired  20% of the common  stock of ACT-AU,  its
Australian   affiliate  for  $19,350,000   consisting  of  5,000,000  shares  of
restricted   common  stock  valued  at  the  average  quoted  trading  price  of
$11,850,000  and a note  payable for  $7,500,000.  The Company has  recorded its
investment  in ACT-AU  under the equity  method of  accounting.  The Company has
reduced  its  investment  in  ACT-AU  by its  proportionate  share  of  ACT-AU's
operating  losses in the  amount of $85,818  for the fiscal  year ended June 30,
2000 and $237,290 for the six months ended December 31, 2000. In September 2000,
the Company repaid $3,500,000 of its obligation to ACT-AU via the issuance of an
additional  5,000,000  shares of its restricted  common stock.  During the three
months ended December 31, 2000, the Company issued an


                                       6
<PAGE>

additional 460,000 shares of its restricted common stock to vendors of ACT-AU in
cancellation of $460,000 of its obligation.  The Company recorded a $23,000 gain
on the  extinguishments of debt on this repayment.  As of December 31, 2000, the
outstanding balance of the Company's note payable to ACT-AU was $3,540,000.

Note 4-Accounts Payable and Accrued Compensation

Included in Accounts Payable and Accrued  Compensation are amounts due the Chief
Executive  Officer of the Company who has elected to defer accrued  compensation
due him. As of December 31, 2000, the Company owed the Chief  Executive  Officer
$374,050 in accrued and unpaid compensation.

Note 5-Note and Loan Payable

(A) Note Payable-Grassland

MFI,  the  Company's  predecessor  was  obligated  to pay  $150,000 to Grassland
Capital ("Grassland") pursuant to a convertible promissory note. During December
1997,  MFI  issued  75,000  of its  common  shares  to settle  the  amounts  due
Grassland.  However,  a dispute  arose as to whether  Grassland  authorized  the
acceptance of the shares and Grassland  subsequently filed a suit to enforce the
convertible  promissory  note. Total interest payable was $84,507 as of June 30,
2000,  resulting in total principal and accrued interest payable to Grassland at
June 30, 2000 of $234,507.  In June 2000,  the Company and  Grassland  agreed to
settle the litigation for a payment of $200,000.  This resulted in a gain on the
extinguishment  of debt in the amount of $34,507.  The Company made a payment of
$50,000 by June 30, 2000.  The  remainder  was to be paid with proceeds from the
75,000 shares of stock with any remaining balance owed to be paid by the Company
by August 14, 2000. The Company defaulted on this revised payment obligation and
a judgment  against the Company was entered.  In October 2000,  the Company sold
the 75,000 shares of stock  realizing  $41,802 which it remitted to Grassland in
partial  payment of its  outstanding  balance.  As of  December  31,  2000,  the
Company's remaining balance on the Grassland obligation is $108,198.  Management
believes that the amounts recorded on its consolidated  financial  statements at
December 31, 2000 and June 30, 2000  respectively,  fairly reflect the Company's
potential liability.

(B) Loan Payable to Affiliate

As of December 31, 2000 and June 30, 2000,  the Company owed an affiliate of the
Chief Executive  Officer $682,500 and $251,500,  respectively.  These funds were
advanced  to  the  Company  to  provide  working  capital  for  normal  business
operations.

Note 6-Convertible Debentures

On September 30, 1999, the Company entered into a secured convertible  debenture
purchase  agreement with two companies,  which are already  stockholders  of the
Company, whereby the Company sold $500,000 of 12% Secured Convertible Debentures
due April 1, 2000, and which were convertible into shares of the Company's Class
A Common Stock.  In addition,  on September 30, 1999, the Company issued another
convertible debenture to Bank Insinger in the


                                       7
<PAGE>

amount of $150,000. The debentures are convertible, at the holder's option, into
shares of common stock in whole or in part at any time after the original  issue
date.  The  number of  shares of common  stock  issuable  upon a  conversion  is
determined by dividing the outstanding  principal  amount of the debenture to be
converted,  plus all accrued and unpaid interest,  by the conversion  price. The
conversion  price in effect on any conversion  date is 50% of the average of the
bid price during the twenty  trading days  immediately  preceding the applicable
conversion date. Of the $650,000 total  debentures,  only $613,550 was received.
As of June 30, 2000,  the  debentures  were not converted and the Company was in
default based on the April 1, 2000 due date.

The convertible  debentures contain a beneficial  conversion feature computed at
its intrinsic value that is the difference  between the conversion price and the
fair value on the  debenture  issuance  date of the common  stock into which the
debt is  convertible,  multiplied by the number of shares into which the debt is
convertible at the commitment date. Since the beneficial  conversion  feature is
to be settled by  issuing  equity,  the  amount  attributed  to this  beneficial
conversion  feature,  or  $650,000,  was  recorded as an interest  expense and a
component of equity on the issuance date.

For the fiscal  year ended  June 30,  2000,  the  Company  amortized  $65,000 in
debenture issuance costs.

During  the three  months  ended  December  31,  2000,  holders of  $412,800  of
debentures  elected  to convert  their  notes into  1,803,545  of the  Company's
restricted common stock resulting in a reduction of the amounts  outstanding and
an increase in the  Company's  stockholders'  equity.  As of December  31, 2000,
$200,750 of Secured Convertible Debentures remain outstanding.

Note 7-Note Payable-ACT-AU

On October 25, 2000 and September 29, 2000, the Company repaid $3,960,000 of its
obligation to its Australian affiliate, ACT-AU, by issuing 460,000 and 5,000,000
shares,  respectively,  of its restricted common stock. As of December 31, 2000,
the balance of the Company' s obligation to ACT-AU was $3,540,000.

Note 8-Settlement Of Debt

As of June 30, 1999, the Company owed certain  former MFI minority  stockholders
$422,561.  On May 25, 1999, the Company,  along with two of its stockholders and
directors, entered into a settlement agreement with these stockholders.

The Company  agreed to issue 600,000  shares of  restricted  common stock within
five days of the  signing  of the  settlement  agreement  and the  stock  option
agreement.  The option  agreement  was  signed in July 1999 and the shares  were
issued. The Company  recognized an extraordinary gain of approximately  $242,561
on the  extinguishment  of debt in the fiscal  year ended June 30, 2000 based on
the quoted trading price of the common stock on the agreement date.


                                       8
<PAGE>

Note 9- Stockholders' Equity

(A) Private Placement

During the period of April 1999 to July 1999,  pursuant  to a private  placement
under  Regulation  D, Rule 504, the Company  issued  5,000,000  shares of common
stock at $.20 per share. The Company received  $1,060,500 from investors,  which
included  an  overpayment  of $60,500.  The  overpayment  was  included in other
liabilities  until it was  credited  to the same  investors  who  subscribed  to
convertible  debentures  in  September,  1999.  The  Company  incurred  offering
expenses of $100,000 in cash and issued  33,750 shares of common stock valued at
$10,800,  based on the quoted  trading  price on the grant date,  in lieu of the
non-accountable  expense  reimbursement.  The value of the cash and common stock
has been charged to equity as direct costs of the offering.

(C) Stock Issued For Services

During the fiscal year ended June 30, 2000, the Company issued  3,085,000 shares
of common stock for services.  The stock was valued based on the quoted  trading
price on the grant dates, which aggregated $3,384,358.

During the three months ended  December 31, 2000,  the Company issued 278,393 of
restricted common stock for services.  The stock issued was valued on the quoted
trading price on the grant dates, which aggregated $193,000.

(D) Common Stock Retirement

During the three months ended  December 31, 2000,  the Company  retired  500,000
shares,  valued at $375,000 of its restricted  common stock originally issued to
the World IP owners in connection with the World IP rescission transaction.

Note 10-Commitments and Contingencies

The Company was named as a defendant in two lawsuits during the six months ended
December 31, 2000. On July 27, 2000,  Bank  Insinger,  the holder of $150,000 of
the Company's 12% Secured Convertible Debentures, filed an action in the Federal
Court in the Eastern  District  of New York  seeking  recovery of the  principal
amount of the obligation plus accrued  interest and other monetary  damages.  On
December 26, 2000,  the Company  settled with Bank  Insinger and the lawsuit was
subsequently dismissed.

On  September  18, 2000,  an action was filed  against the Company by Star Multi
Care  Services,  Inc.  ("Star") for alleged breach of contract and recovery of a
break-up  or  termination  fee in  connection  with  the  Company's  failure  to
consummate a proposed  merger with Star in January  2000.  The Company  believes
that the suit is  without  merit and is  continuing  to  vigorously  defend  the
alleged claim.


                                       9
<PAGE>

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

Nature of Business

Advanced  Communications  Technologies,  Inc.  ("ACT" or the "Company")  (OTCBB:
ADVC), a Florida incorporated  company, is a leading  international  marketer of
wireless  telecommunications  products.  The Company has the exclusive North and
South American marketing rights for a proprietary Software Defined Radio ("SDR")
technology  platform for next generation  wireless  telecommunications  products
being developed by the Company's affiliate in Australia, Advanced Communications
Technologies (Australia) Pty Ltd. ("ACT-AU"), which is owned 20% by the Company.

The core product that the Company  will be marketing is  SpectruCell,  the first
wireless  communications  platform  that offers  mobile  communications  network
providers the flexibility of open architecture and seamless integration with the
ability to process and transmit  multiple  protocols,  such as AMPS, CDMA, TDMA,
GSM, W-CDMA, UMTS, Mobile IP, Voice IP, 3G, etc. through one base station.

SpectruCell  is one of the first  technologies  that  utilizes the SDR operating
platform, which will reduce the network providers' cost for on-going upgrades to
3G  and  beyond,   as  each   upgrade   will  be   software-based   rather  than
hardware-based.  This feature essentially makes SpectruCell implemented networks
future proof. Importantly, SpectruCell will enable existing network providers to
upgrade  their  current  networks  to  the  3G  platforms   through  the  simple
installation of a SpectruCell-based station at each of their cell sites.

Network providers implementing a SpectruCell network architecture are assured of
protecting  their  existing  client  base  through  continued  support  of their
existing  services  (GSM,  CDMA)  while  being able to support  future  3G-based
protocols  like WCDMA,  UMTS,  etc.  This  flexible  migration  path for network
operators  means that they protect their existing  financial  asset while giving
the operator both a technical and financial migration to 3G.

In addition, the Company intends to market several other wireless and networking
products  that are being  developed  by ACT-AU.  These  products are expected to
include:

      o     Spectrum  Efficient  Microwave  ("SEM")  that  delivers  high  speed
            capacity   communications  links  that  will  make  it  possible  to
            implement truly wireless networks;

      o     Wireless Loop  Technology  that will provide  wireless fixed network
            access  compatible with both Voice Over Internet  protocol  ("VOIP")
            and Internet-based protocols;

      o     Smart Antennas that will provide  network  carriers with the ability
            to increase their capacity by directing radio signals to an intended
            target rather than a general broadcasting shotgun approach; and

      o     ACT2001  Network  Provider,  which is a  complete  network  solution
            comprised of the SpectruCell multiple protocol wireless base station
            unit, the SEM and a Wireless Local Loop system.  These products have
            the ability to be utilized individually, however, when


                                       10
<PAGE>

            combined,  they have the ability to be a complete  wireless  network
            that will support individual or multiple wireless protocols.

In January 2001,  ACT-AU received $A4.78 million of a total  approximately  $A13
million  grant from  AusIndustry  to support its  research  and  development  of
SpectruCell and these other technology platforms.

The following is  management's  discussion  and analysis of certain  significant
factors,  which have  affected the  Company's  financial  position and operating
results.  Certain statements under this section may constitute  "forward-looking
statements" (See Part II- Other Information). The following discussion should be
read in conjunction with the Financial Statements and Notes thereto.

COMPARISON OF THE THREE MONTHS ENDED DECEMBER 31, 2000 TO THE THREE MONTHS ENDED
DECEMBER 31, 1999

(a) RESULTS OF OPERATIONS

The Company owns the rights to  distribute  and sell the  "SpectruCell"  product
throughout   North  and  South   America.   Such  product  is  currently   being
commercialized by the Company's Australian affiliate. The Company's wholly-owned
subsidiary,  Advanced Global Communications Technologies,  Inc. ("AGC") provides
wholesale  international  telecom  services  and is the holding  company for all
switching  and  network  operations  and future  planned  acquisitions  of other
switching and telecommunications  companies.  AGC operates an international long
distance  telephone  network  between the U.S. and Pakistan (the  "U.S.-Pakistan
Network"). During the three months ended December 31, 2000, all of the Company's
revenues were generated by AGC's telecom operations.

Revenue.  Revenue for the quarter was $13,261 and was  generated  entirely  from
AGC's U.S.-Pakistan  Network and represents a 100% increase from the comparative
restated three months ended December 31, 1999. Due to various  technical  issues
with the Company's network supplier in England as well as regulatory  changes in
Pakistan,  the U.S-Pakistan  Network was off-line a majority of the three months
ended December 31, 2000. Consequently, while revenue from telephone distribution
sales was up from the comparative restated three months ended December 31, 1999,
the  Company  experienced  a decline in  network  revenue  from the  immediately
preceding three month period.

Cost of Sales. Cost of direct telephone network sales for the three months ended
December  31,  2000  was  $12,528  and  represents  a  100%  increase  from  the
comparative three months ended December 31, 1999.  Because the Company completed
the  U.S.-Pakistan  Network during its first quarter of fiscal 2001, the cost of
sales  reflects  direct  charges and  expenses  for the period  during which the
network was operational.

Operating Expenses.  Operating expenses, net of stock-based compensation charges
of  $133,000,  for the three months  ended  December 31, 2000 were  $520,704 and
represent a $201,712 or 63%  increase in  operating  costs,  net of  stock-based
compensation charges of $485,650, for the


                                       11
<PAGE>

restated three months ended December 31, 1999.  This operating cost increase was
principally  attributable to an increase in costs  associated with the Company's
California  headquarters  and  the  marketing  of  the  Company's  business  and
products.

Interest  expense  incurred for the three months ended December 31, 2000 was $0.
For the comparative  period ended December 31,1999,  interest expense was $7,590
and was  principally  attributable  to accrued  interest on the  Grassland  note
payable.

Other income  (loss) for the three months ended  December 31, 2000  includes the
Company's share,  under the equity method of accounting,  of ACT-AU's  operating
loss for the  quarter of  $115,153.  No loss was  reported  for the  comparative
period ended December  31,1999,  as the Company's  investment in ACT-AU was made
during the fourth quarter of ACT's fiscal year 2000.  Extraordinary gain for the
three  months  ended  December  31,  2000  includes   $23,000  of  gain  on  the
extinguishment of the Company's  obligation to ACT-AU which was partially repaid
with  common  stock  valued in excess of the then  market  price.  For the three
months ended  December 31, 1999,  $121,937 of other income was recognized on the
abandonment of certain accounts payable and accrued expenses of MFI.

COMPARISON  OF THE SIX MONTHS  ENDED  DECEMBER  31, 2000 TO THE SIX MONTHS ENDED
DECEMBER 1999

(a) RESULTS OF OPERATIONS

Revenue.  Revenue  for the six  months  ended  December  31,  2000 was  $50,000,
generated  entirely  from AGC's  U.S.-Pakistan  Network  and  represents  a 100%
increase from the  comparative  restated six months ended December 31, 1999. The
results of operation for the six months ended  December 31, 1999 was restated to
reflect the rescission of the World IP acquisition,  which the Company rescinded
retroactively to November 10,1999.

Cost of Sales.  Cost of direct telephone  network sales for the six months ended
December  31,  2000  was  $57,310  and  represents  a  100%  increase  from  the
comparative  restated  six  months  ended  December  31,  1999.  As the  Company
completed  the  U.S.-Pakistan  Network  during its first quarter of fiscal 2001,
included  in the cost of sales for the six months  ended  December  31, 2000 are
initial  set-up costs to establish  the network in addition to normal  recurring
direct operating charges.

Operating Expenses.  Operating expenses, net of stock-based compensation charges
of $146,120  for the six months  ended  December  31,  2000,  were  $789,572 and
represent a $267,163  increase,  or 51%, in operating  costs, net of stock-based
compensation charges of $981,288, for the restated six months ended December 31,
1999.  This  operating  cost increase was also  principally  attributable  to an
increase in costs  associated  with the  expansion of the  Company's  California
headquarters and the marketing of the Company's business and products.

Interest expense incurred for the six months ended December 31, 2000 was $0. For
the  comparative  six months  ended  December  31,  1999,  interest  expense was
$665,180 of


                                       12
<PAGE>

which $650,000 was attributable to the intrinsic value of the Senior Convertible
Debentures issued by the Company in September 1999.

Other  income  (loss) for the six months ended  December  31, 2000  includes the
Company's share,  under the equity method of accounting,  of ACT-AU's  operating
loss of $237,290. No loss was reported for the comparative period ended December
31,1999,  as the  Company's  investment  in ACT-AU  was made  during  the fourth
quarter of ACT's fiscal year 2000.  Extraordinary  gain for the six months ended
December  31,  2000  includes  $23,000  of  gain on the  extinguishments  of the
Company's  obligation  to ACT-AU  which was  partially  repaid with common stock
valued in excess of the then market  price.  For the  restated  six months ended
December  31, 1999,  extraordinary  gains of $364,498  was  recognized  from the
extinguishments of prior MFI shareholder loans in exchange for 600,000 shares of
the Company's restricted common stock ($242,561) and $121,937 on the abandonment
of certain accounts payable and accrued expenses of MFI.

(b) LIQUIDITY AND CAPITAL RESOURCES

At December  31,  2000,  the  Company's  cash and cash  equivalents  balance was
$15,028 a decrease of $15,126 from the fiscal year ended June 30,  2000.  During
the  quarter,  no cash was provided by  operations.  During the six months ended
December 31, 2000 and 1999,  cash provided by (used in) operations and investing
activities amounted to ($487,928) and ($509,555), respectively. Cash provided by
financing  activities  amounted  to $472,802  and  $638,050,  respectively,  and
consisted  of loans from the  Company's  principal  shareholder  and the sale of
common stock and  convertible  debentures.  During the six months ended December
31, 1999, the Company realized $273,500, net of offering costs, from the private
placement  sale of common stock and $388,050,  net of offering  costs,  from the
issuance of convertible debentures.

The Company had a working capital deficiency in the amount of $1,839,866 for the
six months ended  December 31, 2000.  During the quarter,  the Company  executed
final documentation with Ladenburg Thalmann, a NY-based investment banking firm,
to  secure  a $12  million  equity  line of  credit.  Once  the  equity  line is
effective,  the  Company  will be able to draw down the credit line on a monthly
basis in increments of not less than $500,000. The equity credit line is subject
to receiving the approval by the Securities and Exchange  Commission,  which the
Company  anticipates  receiving  the  beginning of the fourth  quarter of fiscal
2001.  In  addition,  during  November  2000,  the  Company  prepared  a Private
Placement Memorandum under Securities and Exchange Commission Rule 506D to issue
up to $10 million of its  restricted  common stock to accredited  investors.  No
funds have been raised under this offering as of December 31, 2000.

(c) ACQUISITIONS

The  Company's  business  strategy is to i) be a leader in the  development  and
marketing of Software  Defined  Radio  technologies,  ii)  generate  substantial
revenue   through  the  licensing  of  SpectruCell   and  other  products  being
commercialized  and  developed by ACT-AU,  iii) and through the  acquisition  of
telephone network distribution and other technology companies


                                       13
<PAGE>

complementary to the Company's  business.  As part of this growth strategy,  the
Company will  continue to evaluate  and pursue  opportunities  to acquire  other
companies, assets and product lines that either complement or meet the Company's
expansion  criteria.  The Company intends to use available cash from operations,
if any,  authorized  but unissued  common stock and funds from its Equity Credit
line to finance, in whole or in part, its acquisition and expansion plans.

On October 5, 2000,  the Company  entered  into a Letter of Intent  ("LOI") with
Digital Comm Link, Inc., ("Digital") a Florida based privately held corporation,
to acquire a controlling  interest in Digital for approximately $10- $20 million
in stock and cash.  Digital  currently owns and operates a satellite fixed earth
station,  which  receives  and  transmits  voice,  data and  video  signals  for
telecommunications   and  other  media  customers.   The  Company  is  currently
performing due diligence activities on Digital.

(d) ACT QUARTERLY STOCK PRICE

For the Quarter Ended             High          Low
---------------------             ----          ---

December 31, 2000                $1.19         $ .40
September 30, 2000                1.25           .56
June 30, 2000                     2.62          1.03
March 31, 2000                    7.19          2.00
December 31, 1999                 5.50           .31

Part II- OTHER INFORMATION

The statements in this quarterly  report,  Form 10-QSB,  that are not historical
constitute "forward-looking statements". Said forward-looking statements involve
risks and  uncertainties  that may  cause the  actual  results,  performance  or
achievements  of the Company and its subsidiary to be materially  different from
any future  results,  performance  or  achievements,  express or implied by such
forward-looking  statements.  These forward-looking statements are identified by
their  use  of  such  terms  and  phrases  as  "expects",   "intends",  "goals",
"estimates", "projects", "plans", "anticipates", "should", "future", "believes",
and "scheduled".

The variables which may cause differences  include,  but are not limited to, the
following:  i) general economic and business conditions;  ii) competition;  iii)
success  of  operating   initiatives  including  the  commercialization  of  the
SpectruCell  product; iv) financing efforts; v) operating costs; vi) advertising
and  promotional  efforts;  vii) the existence or absence of adverse  publicity;
viii)  changes in business  strategy or  development  plans;  ix) the ability to
retain  management;  x)  availability,  terms and  deployment  of  capital;  xi)
business  abilities and judgment of personnel;  xii)  availability  of qualified
personnel; xiii) labor and employment benefit costs; xiv) availability and costs
of raw  materials  and  supplies;  and xv) changes in, or failure to comply with
various  government   regulations.   Although  the  Company  believes  that  the
assumptions  underlying  the  forward-looking  statements  contained  herein are
reasonable, any of the assumptions could be inaccurate, and therefore, there can
be no assurance that the forward-


                                       14
<PAGE>

looking statements  included in this filing will prove to be accurate.  In light
of the  significant  uncertainties  inherent in the  forward-looking  statements
included herein,  the inclusion of such information  should not be regarded as a
representation  by the Company and/or its  management,  or any person,  that the
objectives and expectations of the Company will be achieved.

ITEM 2. CHANGES IN SECURITIES

During the quarter,  the Company issued 2,541,938 shares of its common stock, of
which  278,393  shares  valued at $193,000 were issued in exchange for services,
460,000  shares  valued at  $460,000  were  issued in partial  repayment  of the
Company's  obligation to ACT-AU,  and 1,803,545  shares of its common stock were
issued in exchange  for  convertible  debentures  having a principal  balance of
$412,800.  During the quarter,  the Company also retired  500,000  shares of its
common stock having a value of $375,000.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is subject to various risks in connection  with the operation of its
business.  These risks include,  but are not limited to, dependence on operating
agreements with foreign partners,  significant foreign and U.S.-based  customers
and  suppliers,  availability  of  transmission  facilities,  U.S.  and  foreign
regulations,  international  economic and political  instability,  dependence on
effective  billing  and  information  systems,  customer  attrition,  and  rapid
technological change. Many of the Company's competitors are significantly larger
and have  substantially  greater  resources  than the Company.  If the Company's
competitors were to devote significant  additional resources to the provision of
international  long distance services to the Company's target customer base, the
Company's  business,  financial  condition,  and results of operations  could be
adversely affected.

The  Company  has  devoted  significant  resources  to  the  build  out  of  the
U.S.-Pakistan Network and for the development,  testing and commercialization of
the SpectruCell  technology.  As a result, the Company has experienced operating
losses and  negative  cash  flows from  operations.  These  losses and  negative
operating  cash flows are  expected to continue  for  additional  periods in the
future.  There can be no assurance  that the  Company's  operations  will become
profitable  or  will  produce  positive  cash  flows.   The  Company's   capital
requirements  for the  commercialization  of its  SpectruCell  product,  for the
continued build out of the U.S.-Pakistan Network and growth of its customer base
and other business initiatives are substantial.  The Company intends to fund its
operational and capital requirements using cash on hand, through proposed credit
and debt facilities and by the issuance of restricted common stock.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


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<PAGE>

ITEM 6. SUBSEQUENT EVENTS, EXHIBITS AND REPORTS ON FORM 8-K

On February 6, 2001,  the Company  announced  that Dr.  Gilbert F.  Amelio,  has
agreed to join the Company's Board of Directors,  to provide management services
to the Company and to assume the role of Chairman and Chief Executive Officer of
the Company upon the formalization of an employment contract. Dr. Amelio was the
former Chairman and Chief Executive Officer of Apple Computer,  Inc.,  Chairman,
President and Chief Executive Officer of National Semiconductor and President of
Rockwell  Communications  Systems,  a  unit  of  Rockwell  International.  He is
currently  a  Director  of SBC  Communications,  Inc.  and a  majority  owner of
Beneventure Capital, LLC, a technology investment and management firm.

On February 8, 2001,  the Company  entered into an agreement with Dr. Amelio and
his majority owned company, Beneventure Capital, LLC, ("Beneventure") to acquire
100% of the assets of  Beneventure.  Beneventure is a technology  investment and
management firm that owns varying interests in private companies involved in the
telecommunication, semiconductor, internet and financial service industries. The
agreement   provides  for  the  acquisition  of  the  assets  and  interests  of
Beneventure in exchange for shares of stock of the Company.

SIGNATURES

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

Advanced Communications Technologies, Inc.
(Registrant)

/s/ Roger T. May
----------------                                   _____________
Roger T. May                                       Date
Chairman and Chief Executive Officer

/s/ Wayne I. Danson
-------------------                                _____________
Wayne I. Danson                                    Date
Chief Financial Officer


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