U.S. Securities and Exchange Commission
                             Washington, D.C. 20549




                                   FORM 10-QSB


[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 for the quarterly period ended March 31, 2001



[ ]  TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 for the transition period from _______ to _______


                         COMMISSION FILE NUMBER 0-28348


                              DBS INDUSTRIES, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)



              Delaware                                 84-1124675
  --------------------------------        ------------------------------------
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
   incorporation or organization)



                        100 Shoreline Highway, Suite 190A
                              Mill Valley, CA 94941
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (415) 380-8055
                           ----------------------------
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|


Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.


Class of Securities:   Common Stock, $.0004 Par Value


Shares Outstanding as of April 30, 2001:  19,757,253


Transitional Small Business Disclosure Format:    Yes: ___     No   X

<PAGE>ii

<TABLE>
<S>                                                                               <C>

                                      INDEX


                                                                                      PAGE

PART I - FINANCIAL INFORMATION..........................................................1

ITEM  1.  Financial Statements..........................................................1

Condensed Consolidated Balance Sheets (unaudited)
As of March 31, 2001  and December 31, 2000 ............................................1

Condensed Consolidated Statements of Operations (unaudited):
For the Three Months Ended March 31, 2001 and March 31, 2000
and for the period from April 25, 1990 (Inception)  to March 31, 2001...................2

Condensed Consolidated Statements of Cash Flows (unaudited):
For the Three Months Ended March 31, 2001 and March 31, 2000
and for the period from April 25, 1990 (Inception) to March 31, 2001 ...................3

Notes to Condensed Consolidated Financial Statements..................................4-8

ITEM  2. Management's Discussion and Analysis of Financial Condition
             and Results of Operations...............................................9-12

PART II - OTHER INFORMATION

ITEM  1. Legal Proceedings.............................................................13

ITEM  4. Submission of Matters to a Vote of Security Holders...........................14

ITEM  6. Exhibits and Reports on Form 8-K..............................................14

</TABLE>


<PAGE>1
                                     PART I
                              FINANCIAL INFORMATION


ITEM 1.
                              FINANCIAL STATEMENTS
                      DBS INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<S>                                                                              <C>             <C>
                                     ASSETS
                                                                                 March 31,      December 31,
                                                                                    2001            2000
                                                                               -------------    ------------

Current assets:
     Cash and cash equivalents                                                 $     43,861    $    389,319
     Prepaid and other current assets                                                60,781          57,378
                                                                               -------------    ------------
       Total current assets                                                         104,642         446,697
                                                                               -------------    ------------

Furniture and equipment (net)                                                        29,838          32,393
Investments, advances and other                                                   2,393,966       2,369,088
Satellite construction costs                                                     12,229,907      12,229,907
                                                                               -------------    ------------
                                                                                 14,653,711      14,631,388
                                                                               -------------   -------------

              Total assets                                                     $ 14,758,353    $ 15,078,085
                                                                               =============   =============
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                                          $  1,534,400    $  1,482,476
     Customer advances                                                              400,000         400,000
     Accrued compensation                                                           328,333         601,132
     Other liabilities                                                               28,295         179,410
                                                                               -------------    ------------
       Total current liabilities                                                  2,291,028       2,663,018
                                                                               ------------    ------------
Stockholders' equity:
     Series A Convertible Preferred Stock, $0.0004 par value 35,897 Shares
       authorized; 25,899 issued and outstanding at March 31, 2001 and
       December 31, 2000;
       (liquidation preference $ 776,970)                                                11              11
     Series B Convertible Preferred stock, $0.0004 par value; 550
       Shares authorized; 440 issued and outstanding at March 31,
       2001 and December 31, 2000                                                        --              --
     Common stock, $0.0004 par value; 50,000,000 shares authorized;
       19,755,055 and 15,601,143 issued and outstanding at
       March 31, 2001 and December 31, 2000, respectively                             7,922           6,260
     Capital in excess of par value                                              30,282,009      29,552,935
     Warrants                                                                     2,995,163       2,911,654
     Deferred stock-based compensation                                             (337,596)       (450,129)
     Deficit accumulated during the development stage                           (20,480,184)    (19,605,664)
                                                                               -------------    ------------
         Total stockholders' equity                                              12,467,325      12,415,067
                                                                               -------------    ------------
              Total liabilities and stockholders' equity                       $ 14,758,353    $ 15,078,085
                                                                               =============   =============

</TABLE>
The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.
<PAGE>2



                      DBS INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<S>                                                      <C>                    <C>                       <C>


                                                                                                            April 25, 1990
                                                                       Three Months Ended                   (Inception) to
                                                                            March 31,                           March 31,
                                                                2001                     2000                     2001
                                                           -------------            -------------            -------------

Revenue                                                    $         --             $         --             $    161,420
Cost and operating expenses:
   Cost of revenue                                                   --                       --                  127,580
   Marketing and sales                                           44,839                  362,500                2,689,187
   General and administrative                                   816,474                  987,833               17,574,982
   Research and development                                         514                  174,707                4,749,303
                                                           -------------            -------------            -------------
                                                                861,827                1,525,040               25,141,052
                                                           -------------            -------------            -------------
     Loss from operations                                      (861,827)              (1,525,040)             (24,979,632)
                                                           -------------            -------------            -------------
Other income (expense):
   Interest, net                                                (12,293)                   1,279                 (668,356)
   Equity in loss of investees, net                                  --                       --                 (512,920)
   Gain (loss) on sale of investment                                 --                       --                5,829,218
   Other, net                                                        --                   (1,721)                 (56,634)
                                                           -------------            -------------            -------------
                                                                (12,293)                    (442)               4,591,308
                                                           -------------            -------------            -------------
Loss before provision
   for income taxes and
   minority interest                                           (874,120)              (1,525,482)             (20,388,324)
Provision for income taxes                                         (400)                      --                 (100,435)
                                                           -------------            -------------            -------------
     Loss before minority interest                             (874,520)              (1,525,482)             (20,488,759)

Minority interest in income of
   consolidated subsidiaries                                         --                       --                    8,575
                                                           -------------            -------------            -------------
     Net loss                                              $   (874,520)            $ (1,525,482)            $(20,480,184)
                                                           =============            =============            =============

Basic and diluted net loss per share                       $      (0.05)            $      (0.11)
                                                           =============            =============
Weighted average number of shares of
   common stock, basic and diluted                           18,096,341               14,378,881
                                                           =============            =============
</TABLE>
The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.
<PAGE>3

                      DBS INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<S>                                                              <C>               <C>                  <C>

                                                                                                        April 25, 1990
                                                                         Three Months Ended             (Inception) to
                                                                              March 31,                    March 31,
                                                                       2001             2000                  2001
                                                                  -------------      --------------      --------------

Reconciliation of net loss to net cash
   used in operating activities
   Net loss                                                       $   (874,520)       $ (1,525,482)       $(20,480,184)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization                                       2,554               3,502             466,395
     Minority interest's share of net loss                                  --                  --              (8,575)
     Noncash charges                                                   216,000                  --           1,974,045
     Amortization of stock-based compensation                          112,532             247,279           2,149,144
     Issuance of options and warrants
       for services rendered                                                --                  --           1,795,516
     Issuance of common stock in connection
       with litigation settlement                                           --                  --             324,391
     Equity in loss of investees, net                                       --                  --             529,972
     Loss (gain) on sales of investments                                    --                  --          (5,829,218)
     Allowance for losses on advances                                       --                  --             216,932
     Common stock issued as payment for interest                            --                  --               7,000
     Decrease (increase) in accounts receivable and
       other assets                                                    (28,281)             35,824             (66,455)
     Increase (decrease) in accounts payable
       and accrued liabilities                                        (371,990)            408,389           1,562,031
     Increase in customer advances                                          --                  --             400,000
                                                                  -------------      --------------      --------------
       Net cash used in operating activities                          (943,705)           (830,488)        (16,959,005)
                                                                  -------------      --------------      --------------

Cash flows from investing activities:
   Proceeds from sale of investment                                         --                  --           1,099,940
   Proceeds from Loral settlement                                           --                  --           3,573,677
   Purchase of furniture and equipment                                      --              (2,704)           (145,441)
   Satellite construction costs                                             --             (35,447)        (12,229,907)
   Organization costs                                                       --                  --             (28,526)
   Repayment (issuance) of note receivable from stockholder                 --                  --             (31,187)
   Purchase of interest in Continental                                      --                  --          (2,292,409)
   Investments, advances and other                                          --                  --          (2,726,325)
   Net assets of purchased subsidiaries                                     --                  --            (147,500)
   Cash transferred from Fi-Tek IV, Inc.
     pursuant to the merger and reorganization                              --                  --             156,648
   Cash of divested subsidiary                                              --                  --                (277)
   Purchase of patents                                                      --                  --             (18,251)
   Proceeds from repayment of advances to affiliate                         --                  --             152,500
   Restricted cash on credit line                                           --                  --             300,000
                                                                  -------------      --------------      --------------
       Net cash used in investing activities                                --             (38,151)        (12,337,057)
                                                                  -------------      --------------      --------------
Cash flows from financing activities:
   Repayment of borrowing under credit line                                 --                  --            (300,000)
   Issuance of debentures                                                   --                  --           4,817,501
   Issuance of Common and Preferred Stock                              675,372           1,021,902          27,292,110
   Redemption of common stock warrants                                      --                  --             (19,490)
   Stock issue costs                                                   (77,125)            (84,634)         (1,367,536)
   Purchase of shares                                                       --                  --              (5,000)
   Payment of debentures                                                    --                  --          (1,168,445)
   Proceeds from stockholders' loans                                        --                  --             442,750
   Payment of stockholders' loans                                           --                  --            (351,967)
                                                                  -------------      --------------      --------------
       Net cash provided by  financing activities                      598,247             937,268          29,339,924
                                                                  -------------      --------------      --------------
Net increase (decrease) in cash and cash equivalents                  (345,458)             68,629              43,861
Cash and cash equivalents, beginning of period                         389,319             282,945                  --
                                                                  -------------      --------------      --------------
Cash and cash equivalents, end of period                          $     43,861        $    351,574        $     43,861
                                                                  =============       =============       =============
</TABLE>
The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.

<PAGE>4

                      DBS INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1 UNAUDITED INTERIM FINANCIAL STATEMENTS

     The  information  presented  in  these  condensed   consolidated  financial
statements  of DBS  Industries,  Inc.  (DBSI or the  Company),  its wholly owned
subsidiaries, Global Energy Metering Services, Inc. and Newstar Limited, and its
majority owned subsidiary, E-SAT, Inc. (the subsidiaries), is unaudited.

     The financial statements include all adjustments  consisting of only normal
recurring  adjustments  which are, in the opinion of  management,  necessary  to
present fairly the condensed  consolidated  financial  position of DBSI at March
31, 2001 and condensed consolidated results of operations and cash flows for the
interim periods reported.  The results of operations for the 2001 interim period
presented are not necessarily  indicative of expected  results for the full 2001
fiscal year.

     These  condensed  consolidated  financial  statements  have  been  prepared
assuming the Company will  continue as a going  concern.  Since  inception,  the
Company has devoted substantially all of its efforts to developing its business.
The Company has therefore  incurred  substantial  losses and negative cash flows
from operating  activities.  To address financing needs, the Company is pursuing
various financing alternatives.  These factors raise substantial doubt about the
Company's ability to continue as a going concern.  These financial statements do
not  reflect  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

     Certain  information  and  footnote   disclosures   normally  contained  in
financial  statements  prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The condensed  consolidated financial
statements should be read in conjunction with the financial statements and notes
contained in DBSI's 2000 Annual Report to Stockholders.


NOTE 2 INVESTMENTS, ADVANCES AND OTHER ASSETS

     E-SAT, Inc. (E-Sat)

     In October 1994,  the Company and EchoStar  formed E-SAT for the purpose of
filing with the FCC for a license to operate a low earth orbit satellite ("LEO")
system. E-SAT filed with the FCC on November 16, 1994.

     On March 31, 1998, the Federal  Communications  Commission approved E-SAT's
application  for a LEO  satellite  license.  E-SAT is required  to meet  certain
milestones  and other  covenants in order to maintain  its license.  On April 8,
1999,  the  Company  notified  the FCC that it had entered  into a  construction
contract for the first two satellites of the E-SAT system on March 31, 1999.

     On July 30, 1999, the Company entered into an agreement with EchoStar under
which it would  receive  60.1% of E-SAT's  shares from  EchoStar in exchange for
consideration,  including  the grant of rights to use up to 20% of the satellite
capacity of the E-SAT system by EchoStar. As a result of this transaction, which


<PAGE>5

                      DBS INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


was subsequently approved by the Federal Communications  Commission, the Company
now owns 80.1% of the E-SAT shares.  In connection with the  negotiations of the
share  purchase  agreement  with  EchoStar,  the Company  paid  $1,517,187  to a
consultant  during  1999 and  capitalized  such  costs in the  E-SAT  investment
account.

     The Company's total  investments in, and advances to, E-SAT as of March 31,
2001 and December 31, 2000 were $851,490.  The investment is accounted for using
the equity method.  The Company's equity in losses of E-SAT for the three months
ended March 31, 2001, and March 31, 2000 were $0.

NOTE 3 SATELLITE CONSTRUCTION COSTS

     During the  construction  of the System,  the Company is  capitalizing  all
design,  engineering,  launch and  construction  costs.  Such costs  amounted to
approximately $12.2 million as of March 31, 2001.


     On December 15, 1998, the Company and Alcatel Space Industries  ("Alcatel")
entered into a Memorandum of Understanding  and authorization to proceed ("MOU")
pursuant to which  Alcatel would become the General  Contractor  for the design,
construction  and launch  services  for the  Company's  planned  low earth orbit
satellites.  Upon  signing of the MOU,  the  Company  made a $1 million  advance
payment to Alcatel.  In January and February 1999,  the Company made  additional
payments to Alcatel totaling $1 million.

     On March 31, 1999, the Company  signed  construction  and launch  contracts
with Surrey Satellite Technology Limited ("Surrey") and Eurockot,  respectively,
and made advance payments of $7.8 million in April 1999 and $2.0 million in July
1999.   Total  payments  under  these   cancelable   contracts  will  amount  to
approximately  $47  million.  In July 1999,  the  Company,  Surrey and  Eurockot
reached  agreements under which $3.2 million of the required  milestone payments
due in July 1999  totaling  $4.8 million were  deferred to yet to be agreed upon
dates.

     On October 8, 1999,  the  Company  signed a  contract  with  Alcatel  Space
Industries for the final design, construction and delivery to the launch site of
six Little LEO  satellites.  This  agreement  also  includes  the final  design,
construction  and delivery of the ground  infrastructure,  including the gateway
earth station,  mission center,  satellite control center, ground communications
network and ground-based transceivers to be installed into devices, like utility
meters.  Alcatel  is also  responsible  for  providing  in-orbit  testing of the
NewStar  System.  The total contract  price for the  end-to-end  system is $88.5
million.  Either party has the right to terminate this  agreement  under certain
circumstances.  The Company paid $2 million in construction payments to Alcatel,
pursuant to which Alcatel  completed the preliminary  engineering  design review
for the  Company's  system,  including  the  payload  design and designs for the
gateway earth station and tracking facilities,  as well as the satellite orbital
analysis and  communications  link margins to and from space. The Agreement with
Alcatel required a payment at the end of 1999 of  approximately  $9.1 million in
cash and the  equivalent  of $5  million  in  Common  Stock.  This  payment  was
necessary for Alcatel to continue work and to trigger an effective  date for our
full system  development  schedule.  As of April 30, 2001,  this payment has not
been made, and Alcatel therefore has the right to consider this contract void as
to further work, and the contract is therefore not currently in effect.

<PAGE>6

NOTE 4 CUSTOMER ADVANCES

     The Company's  wholly-owned  subsidiary,  Global Energy Metering  Services,
Inc. (GEMS), is party to a contract to deliver 10,000 satellite radio units. The
purchase  order is for $1.2 million and under the terms of the  purchase  order,
GEMS would  receive a total of  $500,000 in advance  payments  on the  contract,
based on certain milestone achievements.  As of December 31, 1998, this purchase
order  had  been  suspended  by  both  parties  when  the  Argos  System  became
unavailable.  The  $400,000  in  milestone  payments  received  are  reported as
customer advances on the accompanying  balance sheet.  These milestone  payments
could be subject to refund in whole or in part.

NOTE 5 NET LOSS PER SHARE

     Basic net loss per share is computed  based on the weighted  average number
of common shares outstanding and excludes any potentially  dilutive  securities.
Options  and warrants to purchase 9,127,286 shares of common stock with exercise
prices  from  $0.39 to $5.60  were  outstanding  as of March  31,  2001 and were
excluded  from the loss per share  calculation  for the three month  period then
ended as they have the effect of decreasing loss per share. Options and warrants
to purchase  6,034,797 shares of common stock with exercise prices from $0.53 to
$5.60 were  outstanding as of March 31, 2000 and were excluded from the loss per
share  calculation  for the  quarter  then  ended  as they  have the  effect  of
decreasing loss per share.

NOTE 6 EQUITY TRANSACTIONS

     Preferred Stock

     The Company's Certificate of Incorporation,  as amended in 1999, authorizes
the  issuance of 5,000,000  shares of preferred  stock with par value of $0.0004
per  share.  The  Board of  Directors  of the  Company  is  authorized  to issue
preferred stock from time to time in series.  The Board is further authorized to
establish  such series,  to fix and  determine  the  variations  in the relative
rights and preferences,  and to allow for the conversion of preferred stock into
common stock.

     Common Stock

     The Company's Certificate of Incorporation,  as amended in 1999, authorizes
the  issuance of  50,000,000  shares of common stock with a par value of $0.0004
per share.  Each record  holder of common stock is entitled to one vote for each
share held on all matters properly submitted to the stockholders for their vote.
Cumulative  voting  for  the  election  of  directors  is not  permitted  by the
Certificate of Incorporation.

     Equity Transactions with Non-Employees

     In January  2001, we received  proceeds in a private  placement of $100,000
from an accredited investor in exchange for 290,000 shares of Common Stock and a
warrant to  purchase  36,250  shares of Common  Stock  exercisable  at $0.70 per
share. No commissions were paid. The transaction was exempt from registration in
reliance upon Section 4(2) of the Securities Act.

     In January  2001, we received  proceeds in a private  placement of $200,000
from an accredited investor in exchange for 400,000 shares of Common Stock and a
warrant to purchase  100,000  shares of Common  Stock  exercisable  at $1.00 per

<PAGE>7

                      DBS INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


share. In connection with this  transaction,  a finder's fee of $14,000 was paid
and a warrant was issued for 40,000 shares of Common Stock  exercisable at $1.00
per share.  The fair value of such  warrants  of $16,120  was  recorded as stock
issuance  costs and was  estimated on the date of grant using the Black  Scholes
model.  The  transaction  was exempt from  registration in reliance upon Section
4(2) of the Securities Act.

     In January  2001,  we received  proceeds in a private  placement of $50,000
from three  accredited  investors in exchange for 100,000 shares of Common Stock
and warrants to purchase 12,500 shares of Common Stock  exercisable at $1.00 per
share.  In connection with this  transaction,  a finder's fee of $3,500 was paid
and a warrant was issued for 5,000 shares of Common Stock  exercisable  at $1.00
per share.  The fair value of such  warrants  of $2,155  was  recorded  as stock
issuance  cost and was  estimated  on the date of grant using the Black  Scholes
model.  The  transaction  was exempt from  registration in reliance upon Section
4(2) of the Securities Act.

     In March 2001, we received proceeds in a private placement of $250,000 from
an  accredited  investor in exchange  for 568,000  shares of Common  Stock and a
warrant to purchase  113,636  shares of Common  Stock  exercisable  at $0.90 per
share.  An  additional  warrant  to  purchase  450,000  shares of  Common  Stock
exercisable  at $0.50  per share was  issued  to the same  accredited  investor,
relative  to the same  transaction,  in April  2001.  In  connection  with  this
transaction,  a finder's  fee of $17,500  was paid and a warrant  was issued for
56,818 shares of Common Stock  exercisable at $.90 per share.  The fair value of
such  warrants of $19,034 was recorded as stock  issuance cost and was estimated
on the date of grant using the Black Scholes model.  The  transaction was exempt
from registration in reliance upon Section 4(2) of the Securities Act.

     In March 2001, the Company  received  proceeds of $47,700 from the exercise
of options to purchase 90,000 shares of the Company's Common Stock.

     In March 2001, we issued 488,136 shares of Common Stock of the Company to a
consultant  for  services  rendered  for a total  fair  value of  $216,000.  The
transaction  was exempt from  registration  in reliance upon Section 4(2) of the
Securities Act.

     In December 2000, the Company received from accredited  investors  proceeds
of $100,000 in exchange for 100,000 units, each unit consisting of two shares of
Common Stock at a price of $0.50 per share and a warrant to purchase one-quarter
of one share of  Common  Stock at an  exercise  price of $1.00  per  share.  The
200,000  shares of Common Stock were issued in January 2001. In connection  with
this transaction,  the Company recognized a finder's fee of $7,000, and issued a
warrant to  purchase  10,000  shares of Common  Stock  exercisable  at $1.00 per
share,  in January 2001.  The fair value of such warrants of $3,600 was recorded
as stock  issuance  costs and was estimated on the date of grant using the Black
Scholes model.  The  transaction  was exempt from  registration in reliance upon
Section 4(2) of the Securities Act.

     In December 2000 the Company received from accredited investors proceeds of
$500,000 in exchange for 2,000,000  units,  each unit consisting of one share of
Common  Stock at a price of $0.25 per share and a warrant to purchase  one share
of Common Stock at an exercise  price of $0.50.  The 2,000,000  shares of Common
Stock were issued in January  2001.  In connection  with this  transaction,  the
Company  recognized a finder's fee of $35,000,  and issued a warrant to purchase
100,000 shares of Common Stock  exercisable at $0.50 per share, in January 2001.
The fair value of such warrants of $42,600 was recorded as stock  issuance costs
and was estimated on the date of grant using the Black Scholes model. The

<PAGE>8

transaction  was exempt from  registration  in reliance upon Section 4(2) of the
Securities Act.

     Equity Transactions with Employees

     In January  2001,  6,375 shares of Common  Stock of the Company,  valued at
$10,000, were issued to one of the Company's  non-employee directors for service
on the Board.

     In January 2001, the Company received approximately $3,150 from the sale of
stock to an employee pursuant to the 1999 Employee Stock Purchase Plan.

     In February 2001, stock options to purchase 750,000 shares of the Company's
Common Stock were granted to seven  employees in  accordance  with the Company's
2000 Stock Option Plan.

NOTE 7 SUBSEQUENT EVENTS

     In May 2001,  the  Company  received  a  six-month  loan from four  current
stockholders  in the  amount of  $30,000.  In  consideration  for the loan,  the
Company will pay interest at the rate of 6.5% per annum, and has issued warrants
to said  shareholders  to  purchase  a total of 150,000  shares of Common  Stock
exercisable at $0.25 per share.

<PAGE>9


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

     This  discussion,  other than the  historical  financial  information,  may
consist of  forward-looking  statements  that involve  risks and  uncertainties,
including quarterly and yearly fluctuations in results,  the timely availability
of new communication  products, the impact of competitive products and services,
and the other risks  described  in the  Company's  SEC reports,  including  this
report.  These  forward-looking  statements speak only as of the date hereof and
should not be given undue reliance.  Actual results may vary  significantly from
those projected.

     The Company  undertakes  no  obligation  to  publicly  update or revise any
forward-looking  statements,  whether  as a result  of new  information,  future
events, or otherwise.

General

     DBS  Industries,  Inc.  ("DBSI" or "We" or the  "Company") is a development
stage    telecommunications    company    dedicated   to   providing    low-cost
satellite-to-Internet  data messaging to and from remote locations.  DBSI is the
only  company  currently  licensed  by  the  Federal  Communications  Commission
(through the E-SAT license) to provide  commercial  two-way data messaging using
Code Division  Multiple  Access  technology  and  low-earth-orbiting  satellites
operating below the 1Ghz frequency  range. We expect to begin providing our data
messaging services, marketed under the "NewStar" name, during 2002.

Plan of Operations

     It has been our plan to continue the  construction  and  deployment  of our
system.  This plan has been, and continues to be,  dependent upon our success in
raising adequate  financing.  As of April 30, 2001, market conditions  affecting
the satellite industry continue to impede our financing efforts.

     In response to these current market conditions, management has initiated an
intensive effort to identify and commence  negotiations with strategic  partners
who could serve as both customers and financiers of the Company's  system - both
in and out of the  company's  targeted  meter  reading  market.  The  Company is
involved in a number of such  discussions and we have retained  outside advisors
to assist us in identifying and contacting other significant opportunities.

     At the same time,  management  initiated efforts to reduce the overall cost
of our system and thereby reduce the investment  required to commence commercial
service.

     The current  circumstances  in the  satellite  industry,  as well as in the
broad stock market and technology stocks in particular,  have also led to delays
in raising short-term operating capital. The Company's right to raise capital by
selling  common  shares to the Torneaux  Fund has been limited by the  Company's
stock  price,  which,  as of April  30,  2001 is below the  contractual  minimum
threshold price of $1.00 per share. As a result, the Company has delayed payment
to many of its vendors and certain of its  employees  have  deferred  receipt of
salaries  due. As of March 31, 2001,  the  Company's  cash and cash  equivalents
amounted to $43,861  while its current  liabilities,  including  amounts owed to
employees, amounted to $2,291,028. Throughout the year, management has continued
to focus on  reducing  operating  expenses  while  concentrating  its efforts on
raising short term and strategic financing.

     During   fiscal  2001  we  will  continue  to  seek  to  satisfy  our  cash
requirements  by raising new equity and debt capital,  as well as by seeking the
exercise of  previously  issued  third-party  warrants  and stock  options.  The
issuance  of  additional  equity  securities  by us will  result in  significant
dilution of the equity interests of the current stockholders.


<PAGE>10

Results of Operations

Revenues

     The Company remains in the development  stage and did not generate revenues
in either the quarter ended March 31, 2001 or March 31, 2000.

Operating Expenses

     Total  operating  expenses for the quarters  ended March 31, 2001 and 2000,
were   $861,827  and   $1,525,040   respectively.   The  decrease  is  primarily
attributable  to the reduction of our Marketing and our Research and Development
staff in November 2000.  DBSI's operating  expenses are related to marketing and
sales  expenses,   general  and  administrative   expenses,   and  research  and
development expenses.

Marketing and Sales Expenses

     Marketing  and  sales   expenses  are  primarily  the  costs  of  personnel
(including non-cash stock compensation) and travel. Marketing and sales expenses
for the three  months  ended March 31, 2001 and 2000 were  $44,839 and  $362,500
respectively.  The decrease is due to the  reduction of our marketing  and sales
group  in the  fourth  quarter  of  fiscal  2000 in  order  to  reduce  our cash
expenditures.

General and Administrative Expenses

     General and  administrative  expenses include the costs of finance,  legal,
administrative   and  general   management   functions  of  DBSI.   General  and
administrative  expenses  for the  quarters  ended  March 31, 2001 and 2000 were
$816,474 and $987,833  respectively.  The decrease of $171,359 was primarily due
to decreased personnel costs of $119,000, decrease in legal expenses of $63,000,
and a decrease in consulting expenses of $22,000.

Research and Development Expenses

     Research and development  expenses  represent the costs incurred to develop
our system.  Research and development  expenses for the quarters ended March 31,
2001 and 2000 were $514 and $174,707  respectively.  The decrease was due to the
reduction  of our research and  development  group during the fourth  quarter of
fiscal 2000.

Non-Cash Stock Compensation

     In order to  attract  and  retain  personnel,  we have  granted  options to
purchase  2,033,106 shares of Common Stock at exercise prices ranging from $0.39
to $2.81 to several  employees.  Some of the exercise prices were below the fair
market  value of the Common  Stock at the time of grant,  resulting  in deferred
stock  compensation  of  $2,490,337.  This  amount is being  amortized  over the
vesting periods of the granted options,  and as a result,  $112,532 and $247,279
was  recognized as non-cash  stock  compensation  expense in the quarters  ended
March 31, 2001 and 2000, respectively.

Other Income (Expense)

     We  experienced a  non-operating  loss of $12,293 and $442 for the quarters
ended March 31, 2001 and 2000 respectively. The increase is primarily due to the
increase in interest expense.

<PAGE>11

Net Loss

     Our net loss for the quarter ended March 31, 2001 and 2000 was $874,520 and
$1,525,482  respectively.  The  decrease in net loss was due to cost  reductions
made  by  DBSI's  management  while  we  continue  to seek  system  construction
financing.

Liquidity and Capital Resources

     The Company has been in the  development  stage since its inception and has
not  recognized  any  significant   revenues.   Our  monthly  expenses  averaged
approximately  $291,000  per month  during  the first  quarter  of fiscal  2001,
compared to $508,000  during the first  quarter of fiscal 2000.  However,  if we
proceed to raise sufficient financing, expenses will increase during fiscal 2001
with  the  demands  of  increased  efforts  in  developing  our  systems  and in
implementing our business plan.  Additional  capital will be necessary to expand
operations or continue current operations.

     During the quarter ended March 31, 2001, we received proceeds from the sale
of common stock totaling  approximately  $675,000 before stock issuance costs of
approximately   $77,000.   These  transactions  include  private  placements  of
1,358,182  shares  of the  Company's  common  stock for an  aggregate  amount of
$600,000 and proceeds in the amount of  approximately  $48,000 from the exercise
of 91,375 options and warrants.  The proceeds from these  transactions were used
primarily to fund our ongoing operations and investing activities.

     We had cash and cash  equivalents  of $43,861 and  $351,574 as of March 31,
2001 and 2000  respectively.  We had a negative working capital of $2,186,386 as
of March 31, 2001,  compared to a negative  working  capital of $1,304,640 as of
March 31, 2000. Until we are able to develop,  construct and operate the NewStar
System  and  derive  revenues  therefrom,  we must  continue  to raise cash from
outside sources for operations and for the development of the NewStar System.

     Net cash used in operating  activities for the quarter ended March 31, 2001
was $943,705.  This resulted from a net loss of $874,520 offset primarily by (1)
Common  Stock  issued for  consulting  services in the amount of  $216,000,  (2)
non-cash  stock  compensation  of $112,532,  and increased by (3) a reduction in
accounts  receivable and other assets of $28,281 and (4) a reduction in accounts
payable and accrued liabilities of $371,990.

     Net cash used in investing activities for the quarter ended March 31, 2001,
was $0 as compared to $38,151 for the quarter  ended March 31, 2000.  Due to the
Company's  focus on its financing  efforts,  no fixed assets were  purchased nor
payments made for the construction of its satellite system.

     Net cash provided by financing  activities  for the quarter ended March 31,
2001,  was  $598,247  compared to $937,268  for the same period  ended March 31,
2000. Net cash provided by financing  activities  during the quarter ended March
31, 2000 was related primarily to the net proceeds from the sale of units of the
Company's  Common  Stock  and  the  exercise  of  options  and  warrants  by our
stockholders.

     In 1996, we received  milestone  payments under the terms of a $1.2 million
purchase order for 10,000  satellite radio units from ABB. Under this agreement,
the Company was  eligible to receive up to $500,000  towards  development  costs
upon meeting the milestone  requirements of the contract.  We met the first four
milestones  of the  contract  and have  received  $400,000 in cash.  The parties
agreed to suspend all development  under this agreement due to the expiration of
the  Company's  agreement  for the use of the Argos System on December 31, 1997,
and the subsequent  limits placed on future  commercial use of the Argos System.
Therefore,  such milestone  payments could be subject to refund,  in whole or in
part.

<PAGE>12

Risks and Uncertainties Affecting Future Operating Results

     A number of factors could cause future  results to differ  materially  from
historic  results.  We are a development stage company and as of March 31, 2001,
we had no customers.  Given our limited  operating history and lack of revenues,
no  assurances  can be given that we will be able to construct and implement our
systems,  and, if implemented,  to develop a sufficiently large customer base to
be profitable.

     While  we  continue  the  strategic  fund-raising  efforts  (see  "Plan  of
Operations") that are necessary to our ultimate  success,  our continued cost of
operations  significantly  exceeds  our  short-term  capital.  In  addition,  we
currently  estimate that we will require  approximately  $120 million in capital
related to the  construction  and launch costs  associated  with our system.  No
assurance can be given that the capital will be available to us on  commercially
acceptable  terms to meet  development  costs or on terms  acceptable to us. The
issuance  of  additional  equity  securities  by us will  result in  significant
dilution of the equity  interests  of the  current  stockholders.  Selling  debt
securities  such  as  bonds  will  increase  our  liabilities  and  future  cash
commitments.  In order to comply with development milestones required by the FCC
license,  we  have  entered  into  various  development  contracts  including  a
satellite  construction  contract and a satellite launch contract.  All of these
contracts  require  that  we  have  available  capital  that  is  not  currently
available.

     Other factors, in addition to those identified in this filing,  which could
affect future results would include the  dependence  and  uncertainty of utility
companies or other commercial  customers to utilize our data messaging  service,
the reliance on third parties for the  advancement of the design,  manufacturing
and marketing of the NewStar  System,  satisfying  the milestones of E-SAT's FCC
license and construction  contracts,  the fulfillment of contract obligations by
suppliers and other third parties,  the availability of qualified  personnel and
equipment, delays in the receipt of or failure to receive necessary governmental
approvals,  obtaining  permits  and  licenses  or  renewals  thereof,  risks and
uncertainties  relating  to general  economic  and  political  conditions,  both
domestically and internationally,  changes in the law and regulations  governing
our  activities in the Little LEO satellite  technology,  unscheduled  delays or
technological   difficulties,   satellite  launch  risks,   potential  satellite
malfunction, limited availability of insurance, results of our financing efforts
and marketing  conditions,  competition,  and other risk factors  related to our
business.  Readers of this  filing are  cautioned  not to put undue  reliance on
"forward  looking"  statements that are, by their nature,  uncertain as reliable
indicators of future performance.

     Successfully  addressing the factors  discussed above is subject to various
risks described in this report,  as well as other factors that generally  affect
the market for stocks of development  stage,  high technology  companies.  These
factors could affect the price of our stock and could cause such stock prices to
fluctuate significantly over relatively short periods of time.



<PAGE>13
                                     PART II

                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        None.

ITEM 2. RECENT SALES IN UNREGISTERED SECURITIES

          (a)  In January 2001, we received  proceeds in a private  placement of
               $100,000  from an  accredited  investor in  exchange  for 290,000
               shares of Common Stock and a warrant to purchase 36,250 shares of
               Common Stock  exercisable at $0.70 per share. No commissions were
               paid. The  transaction  was exempt from  registration in reliance
               upon Section 4(2) of the Securities Act.

          (b)  In January 2001, we received  proceeds in a private  placement of
               $200,000  from an  accredited  investor in  exchange  for 400,000
               shares of Common Stock and a warrant to purchase  100,000  shares
               of Common Stock  exercisable  at $1.00 per share.  In  connection
               with this  transaction,  a finder's fee of $14,000 was paid and a
               warrant was issued for 40,000 shares of Common Stock  exercisable
               at $1.00 per share.  The fair value of such  warrants  of $16,120
               was  recorded as stock  issuance  costs and was  estimated on the
               date of grant using the Black Scholes model.  The transaction was
               exempt from  registration  in reliance  upon  Section 4(2) of the
               Securities Act.

          (c)  In January 2001, we received  proceeds in a private  placement of
               $50,000 from three  accredited  investors in exchange for 100,000
               shares of Common Stock and warrants to purchase  12,500 shares of
               Common Stock  exercisable at $1.00 per share.  In connection with
               this transaction, a finder's fee of $3,500 was paid and a warrant
               was issued for 5,000 shares of Common Stock  exercisable at $1.00
               per share. The fair value of such warrants of $2,155 was recorded
               as stock  issuance  cost and was  estimated  on the date of grant
               using the Black Scholes model.  The  transaction  was exempt from
               registration in reliance upon Section 4(2) of the Securities Act.

          (d)  In January  2001,  6,375  shares of Common  Stock of the Company,
               valued  at  $10,000,   were  issued  to  one  of  the   Company's
               non-employee directors for service on the Board.

          (e)  In January 2001, the Company received  approximately  $3,150 from
               the sale of stock to an employee  pursuant  to the 1999  Employee
               Stock Purchase Plan.

          (f)  In February 2001, stock options to purchase 750,000 shares of the
               Company's  Common  Stock  were  granted  to  seven  employees  in
               accordance with the Company's 2000 Stock Option Plan.

          (g)  In March 2001,  we received  proceeds in a private  placement  of
               $250,000  from an  accredited  investor in  exchange  for 568,000
               shares of Common Stock and a warrant to purchase  113,636  shares
               of Common  Stock  exercisable  at $.90 per share.  An  additional
               warrant to purchase 450,000 shares of Common Stock exercisable at
               $0.50  per  share was  issued  to the same  accredited  investor,
               relative to the same  transaction,  in April 2001.  In connection
               with this  transaction,  a finder's fee of $17,500 was paid and a
               warrant was issued for 56,818 shares of Common Stock  exercisable
               at $.90 per share. The fair value of such warrants of $19,034 was
               recorded as stock  issuance cost and was estimated on the date of
               grant using the Black Scholes model.  The  transaction was exempt
               from registration in reliance upon Section 4(2) of the Securities
               Act.

          (h)  In March 2001, the Company received  proceeds of $47,700 from the
               exercise of options to purchase  90,000  shares of the  Company's
               Common Stock.

<PAGE>14


          (i)  In March 2001,  we issued  488,136  shares of Common Stock of the
               Company to a consultant  for  services  rendered for a total fair
               value of $216,000.  The transaction was exempt from  registration
               in reliance upon Section 4(2) of the Securities Act.

ITEM 4  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None.

ITEM 6.

          (a)  Exhibits:

               None.

          (b)  Reports on Form 8-K:

               None.



<PAGE>15



                                   SIGNATURES

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

                                             DBS INDUSTRIES, INC.



         DATE:  May 14, 2001                 By:  /s/ FRED W. THOMPSON
                                                      ------------------------
                                                      Fred W. Thompson,
                                                      President

                                             By: /s/  STANTON C. LAWSON
                                                      ------------------------
                                                      Stanton C. Lawson
                                                      Chief Financial Officer