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


                            -------------------------

                                   FORM 10-QSB

                            -------------------------


           X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          ---  SECURITIES EXCHANGE ACT OF 1934 for the quarterly period
               ended June 30, 2000

               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          ---  SECURITIES EXCHANGE ACT OF 1934 for the transition period
               from _______ to ________



                           Commission File No. 0-28348



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

                Delaware                                 84-1124675
       (State or other jurisdiction         (I.R.S. Employer Identification No.)
     of 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 October 31, 2000:    15,418,125

Transitional Small Business Disclosure Format:  Yes:           No:  X
                                                     ---           ---

<PAGE>


                                      INDEX


                                                                            PAGE

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

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

Condensed Consolidated Balance Sheets:
As of September 30, 2000 (unaudited) and December 31, 1999.....................1

Condensed Consolidated Statements of Operations (unaudited):
For the Three and Nine Months Ended September 30, 2000 and September
30, 1999 and for the period from April 25, 1990 (Inception) to
September 30, 2000.............................................................2

Condensed Consolidated Statements of Cash Flows (unaudited):
For the Nine Months Ended September 30, 2000 and September 30, 1999
and for the period from April 25, 1990 (Inception) to September 30, 2000 ......3

Notes to Condensed Consolidated Financial Statements.........................4-9

ITEM  2. Management's Discussion and Analysis of Financial Condition
             and Results of Operations.....................................10-14

PART II - OTHER INFORMATION...................................................15

ITEM  1. Legal Proceedings....................................................15

ITEM  2. Recent Sales in Unregistered Securities...........................15-16

ITEM  6. Exhibits and Reports on Form 8-K.....................................16


                                       ii
<PAGE>

                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.                        FINANCIAL STATEMENTS


                      DBS INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                     September 30,  December 31,
                                                         2000           1999
                                                      (Unaudited)
                                                     -------------  ------------

Current assets:
     Cash and cash equivalents                       $     24,287  $    282,945
     Prepaid and other current assets                     108,939       114,439
                                                     ------------  ------------

       Total current assets                               133,226       397,384
                                                     ------------  ------------

Furniture and equipment, net                               38,921        48,211
Investments and license acquisition costs               2,369,571     2,370,618
Satellite construction costs                           12,227,017    12,072,873
Deferred stock offering costs                                   0       673,500
                                                     ------------  ------------

                                                       14,635,509    15,165,202

              Total assets                           $ 14,768,735  $ 15,562,586
                                                     ============  ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                $  1,444,682  $    478,334
     Customer advances                                    400,000       400,000
     Accrued liabilities                                1,366,354       460,577
                                                     ------------  ------------

       Total current liabilities                        3,211,036     1,338,911
                                                     ------------  ------------

Stockholders' equity:
     Preferred stock, $0.0004 par value; 5,000,000
     shares authorized; 34,231 issued and
     outstanding at September 30, 2000                         14          --
     Common stock, $0.0004 par value; 50,000,000
       shares authorized; 15,323,107 and 14,354,911
       issued and outstanding at September 30, 2000
       and December 31, 1999, respectively                  6,149         5,762
     Capital in excess of par value                    28,862,053    26,968,174
     Warrants                                           2,994,747     1,890,436
     Note receivable from stockholder                     (60,000)      (60,000)
     Deferred stock-based compensation                   (842,237)   (1,532,582)
     Deficit accumulated during the development
       stage                                          (19,403,027)  (13,048,115)
                                                     ------------  ------------
         Total stockholders' equity                    11,557,699    14,223,675
                                                     ------------  ------------

              Total liabilities and stockholders'
                equity                               $ 14,768,735  $ 15,562,586
                                                     ============  ============

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       1
<PAGE>

                      DBS INDUSTRIES, INC. AND SUBSIDIARIES
                          (A Development Stage Company)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                       April 25, 1990
                                    Three Months Ended          Nine Months Ended      (Inception) to
                                       September 30,              September 30,         September 30,
                                    2000          1999          2000          1999          2000
                                ------------  ------------  ------------  ------------  ------------

<S>                             <C>           <C>           <C>           <C>           <C>
Revenue                         $       --    $       --    $       --    $       --    $    161,420
                                ------------  ------------  ------------  ------------  ------------

Cost and operating expenses:
   Cost of revenue                      --            --            --            --         127,580
   Marketing and sales               235,288       297,791       902,260       297,791     1,824,883
   General and administrative      2,383,578     1,453,861     5,033,771     3,130,660    17,756,370
   Research and development          181,554       455,606       419,357       814,830     4,431,371
                                ------------  ------------  ------------  ------------  ------------
                                   2,800,420     2,207,258     6,355,388     4,243,281    24,140,204
                                ------------  ------------  ------------  ------------  ------------
     Loss from operations         (2,800,420)   (2,207,258)   (6,355,388)   (4,243,281)  (23,978,784)
                                ------------  ------------  ------------  ------------  ------------

Other income (expense):
   Interest, net                         270        25,804         2,197       101,453      (593,926)
   Equity in loss of
     investees, net                     --            --            --            --        (512,920)
   Gain on sales of
     investments                        --            --            --            --       5,829,218
   Other, net                           --            --          (1,721)         --         (58,355)
                                ------------  ------------  ------------  ------------  ------------
                                         270        25,804           476       101,453     4,664,017
                                ------------  ------------  ------------  ------------  ------------
     Loss before provision
      for income taxes and
      minority interests          (2,800,150)   (2,181,454)   (6,354,912)   (4,141,828)  (19,314,767)

Provision for income taxes              --            --            --            --         (96,835)
                                ------------  ------------  ------------  ------------  ------------

     Loss before minority
       interests                  (2,800,150)   (2,181,454)   (6,354,912)   (4,141,828)   19,411,602)

Minority interests in income of
   consolidated subsidiaries            --            --            --            --           8,575
                                ------------  ------------  ------------  ------------  ------------

     Net loss                   $ (2,800,150) $ (2,181,454) $ (6,354,912) $ (4,141,828) $(19,403,027)
                                ============  ============  ============  ============  ============

Basic net loss per share        $      (0.19) $      (0.15) $      (0.44) $      (0.33)
                                ============  ============  ============  ============

Diluted net loss per share      $      (0.19) $      (0.15) $      (0.44) $      (0.33)
                                ============  ============  ============  ============

Weighted average number of
   shares of common stock,
   basic                          14,946,553    14,266,067    14,615,607    12,665,510
                                ============  ============  ============  ============

Weighted average number of
   shares of common stock,
   diluted                        14,946,553    14,266,067    14,615,607    12,665,510
                                ============  ============  ============  ============
</TABLE>

              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       2
<PAGE>


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

<TABLE>
<CAPTION>
                                                                            April 25, 1990
                                                     Nine Months Ended      (Inception) to
                                                       September 30,         September 30,
                                                     2000          1999          2000
                                                 ------------  ------------  ------------


<S>                                              <C>           <C>           <C>
Reconciliation of net loss to net cash
   used in operating activities:
   Net loss                                      $ (6,354,912) $ (4,141,828) $(19,403,027)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
     Depreciation and amortization                     11,320        10,737       458,295
     Minority interest's share of net loss               --            --          (8,575)
     Non-cash charges                                 (60,000)         --       1,024,545
     Amortization of stock-based compensation         690,345          --       1,648,100
     Issuance of options and warrants
       for services rendered                        1,776,325        28,859     2,550,623
     Issuance of common stock in connection
       with litigation settlement                        --         324,291       324,391
     Equity in loss of investees, net                    --            --         529,972
     Gain on sales of investments                        --            --      (5,829,218)
     Loss on disposal of equipment                      1,721          --           1,721
     Allowance for losses on advances                    --            --         216,932
     Common stock issued as payment for interest         --            --           7,000
     Decrease (increase) in prepaid and other
       current assets                                   5,500        13,427       (89,735)
     Increase (decrease) in accounts payable and
       accrued liabilities                          2,242,496     1,760,347     2,852,411
     Increase in customer advances                       --            --         400,000
                                                 ------------  ------------  ------------
       Net cash used in operating activities       (1,687,205)   (2,004,167)  (15,316,565)
                                                 ------------  ------------  ------------

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)      (17,511)     (148,145)
   Satellite construction costs                      (154,144)  (11,892,646)  (12,227,017)
   Organization costs                                    --            --         (28,526)
   Advances to officer                                   --         (60,000)      (91,187)
   Purchase of interest in Continental                   --            --      (2,292,409)
   Investments and license acquisition costs             --      (1,517,187)   (2,726,807)
   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         (156,848)  (13,487,344)  (12,397,354)
                                                 ------------  ------------  ------------

Cash flows from financing activities:
   Repayment of borrowing under credit line              --            --        (300,000)
   Issuance of debentures                                --            --       4,817,501
   Issuance of preferred and common stock           1,688,710    15,559,354    25,080,007
   Redemption of common stock warrants                   --            --         (19,490)
   Stock issue costs                                 (103,315)     (154,100)     (757,150)
   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                                 1,585,395    15,405,254    27,738,206
                                                 ------------  ------------  ------------

Net increase in cash and cash equivalents            (258,658)      (86,257)       24,287
Cash and cash equivalents, beginning
  of period                                           282,945     1,291,711          --
                                                 ------------  ------------  ------------
Cash and cash equivalents, end of period         $     24,287  $  1,205,454  $     24,287
                                                 ============  ============  ============
</TABLE>
              The accompanying notes are an integral part of these
                  condensed consolidated financial statements.

                                       3
<PAGE>

                      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)
           and its wholly owned  subsidiaries,  Global Energy Metering Services,
           Inc. and NewStar Limited (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  September  30,  2000  and  condensed
           consolidated  results of  operations  and cash flows for the  interim
           periods  reported.  The results of  operations  for the 2000  interim
           period  presented are not necessarily  indicative of expected results
           for the full 2000 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
           and requires  substantial  capital.  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 1999 Annual Report to Shareholders.


NOTE 2     INVESTMENTS AND LICENSE ACQUISITION COSTS
           -----------------------------------------

           E-SAT, Inc. (E-SAT)

                  In October 1994, the Company and EchoStar Communications, Inc.
           formed   E-SAT  for  the   purpose   of  filing   with  the   Federal
           Communications  Commission (FCC) for a license to operate a low earth
           orbit (LEO) satellite system.  E-SAT filed a license application with
           the FCC on November  16,  1994.  The Company  holds a 20% interest in
           E-SAT.   The  Company's  total   investments  in  E-SAT  and  license
           acquisition  costs were  $2,369,571  as of September  30,  2000.  The
           investment is accounted for using the equity method.

                  On March  31,  1998,  the  Federal  Communications  Commission
           approved E-SAT's application for a low earth orbit 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 will  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, the Company will own 80.1%

                                       4
<PAGE>

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


           of the E-SAT shares. This transfer of control agreement is subject to
           approval by the FCC, which was formally  requested by the Company and
           EchoStar on May 2, 2000.


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 September
           30, 2000.

                  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 for design services.

                  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 $9.8 million in
           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 and Alcatel  entered  into an
           agreement under which Alcatel will serve as prime  contractor for the
           construction   of   the   Company's   low   earth   orbit   satellite
           communications  system.  This  agreement  becomes  effective upon the
           Company's payment of $14.1 million to Alcatel. As of October 31, 2000
           this payment,  which was  originally  due in November,  1999, has not
           been made and therefore  the agreement  with Alcatel is not currently
           in effect.


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 is reported
           as  customer  advances  on  the  accompanying  balance  sheet.  These
           milestone payments could be subject to refund in whole or in part.


                                       5
<PAGE>

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


NOTE 5     NET LOSS PER SHARE
           ------------------

                  Basic net  income  (loss) per share is  computed  based on the
           weighted average number of common shares outstanding and excludes any
           potential  dilution.  Diluted net income per share  reflects  diluted
           effects of all  outstanding  common  stock  equivalents.  Options and
           warrants to purchase  6,666,737 and 6,018,531  shares of common stock
           with  exercise  prices  from  $0.39 to $5.60 were  outstanding  as of
           September 30, 2000 and September 30, 1999 respectively. These options
           and warrants were excluded  from the loss per share  calculation  for
           the  quarter and the nine month  periods  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.

                  During the nine months ended  September 30, 2000,  the Company
           sold an  aggregate  of  35,897  shares  of its  Series A  Convertible
           Preferred  Stock at $30 per  share,  for an  aggregate  placement  of
           $1,076,910.   The  shares  of  preferred  stock  have  a  liquidation
           preference of $30.00 per share and were initially convertible, at the
           option of the holder,  into ten shares of our common  stock,  or at a
           rate of  $3.00  per  common  share.  Per the  conversion  terms,  the
           conversion  rate was adjusted  based upon the 5-day  average  closing
           price of the  Company's  common  stock three  months after the shares
           were issued,  because the  Company's  common stock was trading  below
           $3.00 per share.  Commissions were paid to one placement agent in the
           aggregate amount of approximately  $7,000,  plus a warrant was issued
           in July 2000 to the  placement  agent to  purchase  57,586  shares of
           common  stock  at the  exercise  price  of  $3.00  per  share.  As of
           September 30, 2000,  34,231 shares of Series A Preferred  Shares were
           issued and outstanding and accreted dividends totaled $28,112.

           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

                  During the nine months ended  September 30, 2000,  the Company
           issued  35,897 shares of the  Company's  Series A Preferred  Stock in
           exchange  for gross  proceeds of  $1,076,910  in cash.  The shares of
           preferred stock have a liquidation preference of $30.00 per share and
           were  initially  convertible,  at the option of the holder,  into ten
           shares of our common  stock,  or at a rate of $3.00 per common share.
           Per the conversion terms, the conversion rate was adjusted based upon
           the 5-day average  closing price of the Company's  common stock three
           months after the shares were  issued,  because the  Company's  common


                                       6
<PAGE>

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


           stock was trading  below $3.00 per share.  In September  2000,  1,666
           shares of the Company's  Series A Preferred Stock were converted into
           29,728 shares of the Company's common stock.

                  In May 2000, the Company granted  warrants to purchase 300,000
           shares of common stock to a consultant  for  services  rendered.  The
           warrants  are  exercisable  through May 2003 at an exercise  price of
           $0.67 per share.  The fair value of such  warrants  of  $470,700  was
           expensed  and was  estimated  on the date of grant  using  the  Black
           Scholes model with volatility of 150%, expected life of 3 years, risk
           free  interest rate of 6% and a fair market value of the common stock
           of $1.75 per share.

                  In  June  2000,  the  Company  issued  66,667  shares  of  the
           Company's  Common  Stock,  valued at $100,000 to one of the Company's
           suppliers for services rendered.

                  In  June  2000,  the  Company  issued  166,298  shares  of the
           Company's Common Stock, in exchange for gross proceeds of $166,298 in
           cash, to three accredited investors.

                  On June 2, 2000, the Company entered into an agreement to sell
           shares of its Common  Stock,  at the  Company's  option,  to Torneaux
           Ltd., a corporation organized in the Bahamas. In connection with this
           transaction,  the Company issued a Warrant to purchase 250,000 shares
           of its Common Stock at an exercise price of $1.01 per share for which
           the fair market  value of $294,500 was recorded as an expense and was
           estimated  on the date of grant  using the Black  Scholes  model with
           volatility of 150%, expected life of 3 years, risk free interest rate
           of 6% and a fair market value of the common stock of $0.90 per share.

                  In July 2000, the Company granted  warrants to purchase 57,586
           shares of common stock to a consultant  for  services  rendered.  The
           warrants are  exercisable  through July 2005 at an exercise  price of
           $3.00 per share.  The fair  value of such  warrants  of  $69,909  was
           expensed  and was  estimated  on the date of grant  using  the  Black
           Scholes model with volatility of 150%, expected life of 5 years, risk
           free  interest rate of 6% and a fair market value of the common stock
           of $1.38 per share.

                  Also  in July  2000,  the  Company  received  $100,000  from a
           private  placement  of  133,333  shares of Common  Stock and  granted
           warrants  to  purchase  10,000  shares of common  stock per  previous
           agreement.  The  warrants  are  exercisable  through  July 2004 at an
           exercise price of $0.75 per share.

                  In August  2000,  the  Company  granted  warrants  to purchase
           49,000 shares of common stock to a consultant for services  rendered.
           The warrants are exercisable through August 2003 at an exercise price
           of $0.9062 per share.  The fair value of such warrants of $36,309 was
           expensed  and was  estimated  on the date of grant  using  the  Black
           Scholes model with volatility of 150%, expected life of 3 years, risk
           free  interest rate of 6% and a fair market value of the common stock
           of $0.90 per share.

                  In September 2000, warrants for 125,000 shares of common stock
           were  exercised  at the  reduced  price of $.70 per  share  and a new
           warrant to purchase an additional  125,000  shares of common stock at

                                       7
<PAGE>

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


           an exercise price of $1.1875 per share was issued.  The warrants were
           originally issued in connection with the agreement with Torneaux Ltd.
           to sell, at the Company's option, shares of its common stock.

                  In September  2000, the Company  granted  warrants to purchase
           200,000 shares of common stock to a consultant for services rendered.
           The warrants are  exercisable  through  September 2003 at an exercise
           price  ranging from $1.50 to $2.50 per share.  The fair value of such
           warrants of $194,500 was  expensed  and was  estimated on the date of
           grant using the Black Scholes model with volatility of 150%, expected
           life of 3 years,  risk  free  interest  rate of 6% and a fair  market
           value of the common stock of $1.25 per share. Also in September,  the
           Company sold 84,490 shares of common stock valued at $.9863 per share
           and granted  warrants to purchase 42,245 shares of common stock at an
           exercise  price of $1.1342 per share as per  agreement  with Torneaux
           Ltd.  The  warrants  are  exercisable  through  September  2003 at an
           exercise price of $1.1342 per share.

                  Also in  September,  the Company  issued  29,728 shares of the
           Company's  Common Stock in exchange for 1,666 shares of the Company's
           Series A Preferred Stock.

                  As of September 30, 2000, the total year-to-date proceeds from
           the sale of 391,572  shares of Common Stock was  $360,482,  the total
           year-to-date  proceeds  from the sale of  35,897  shares  of Series A
           Preferred Stock was $1,076,910,  and the total year-to-date  proceeds
           from the exercise of warrants and options to purchase  266,370 shares
           of Common Stock was approximately $251,318.


NOTE 7     SUBSEQUENT EVENTS


                  While we continue the fund-raising  efforts that are necessary
           to complete construction of our E-Sat satellite system, our continued
           cost of operations  significantly  exceeds our short-term capital. In
           October,  we reduced our monthly operating  expenses by discontinuing
           our NewStar marketing efforts and certain of our engineering  efforts
           in Toulouse,  France,  so as to concentrate  all resources on funding
           issues.  H.Tate Holt,  the  President of Newstar,  will remain on the
           Board  of  Directors  after  his  contract  terminates  at the end of
           November.

                  On October 5, 2000,  the company  received  gross  proceeds of
           $55,556  from the sale of 63,092  shares of Common Stock and issued a
           warrant  for the  purchase  of 31,546  shares  of Common  Stock at an
           exercise  price of  $1.0126  per share  pursuant  to  agreement  with
           Torneaux Ltd. Dated June 2, 2000.

                  On October  18, the  company  issued  29,728  shares of Common
           Stock as a result  of the  conversion  of  1,666  Series A  Preferred
           Stock.

                  On October 6, 2000 the  Company  received  gross  proceeds  of
           $400,000  from the sale to two  investors  of  convertible  preferred
           stock and warrants for common stock.  In  connection  with this stock
           offering,  the company issued: (1) 400 shares of series B convertible
           preferred  stock ("Series B Preferred")  and (2) warrants to purchase
           83,660  shares of common  stock with an exercise  price of $1.052 per
           share and (3) warrants to purchase 83,660 shares of common stock with

                                       8
<PAGE>

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


           an exercise price of $1.434 per share. The Series B Preferred may not
           be  converted,  and the company has the right to redeem these shares,
           if the company  repays  within six months the purchase  price plus an
           additional 5-7% depending on repayment date, plus dividends at a rate
           of 10% per  annum.  After six  months,  the  Series B  Preferred  are
           convertible into common stock at the lesser of (1) approximately $.96
           per share which was the closing bid price at the time of the purchase
           or (2) 80% of the average of the three  lowest  closing bid prices of
           the  common  stock  for  the  20  day  trading  period  prior  to the
           conversion  date.  After  six  months,   the  company  also  has  the
           obligation to register the common stock  underlying  the warrants and
           common  stock   underlying   any   unredeemed   Series  B  Preferred.
           Intercoastal  Financial Services Corp.  receives an agent fee that is
           in negotiation but is estimated to be 40 shares of Series B Preferred
           and  warrants  to  purchase  120,000  shares of common  stock with an
           exercise price of $1.052 per share.




                                       9
<PAGE>

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
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,  currently
marketed under the "NewStar" name, during 2002.

Plan of Operations

         Throughout 2000, it has been our plan to continue the deployment of our
license and the construction of our system. This plan has been, and continues to
be, dependent upon our success in raising adequate financing.  As of October 31,
2000,  difficulties in the satellite  industry  continue to impede our financing
efforts.

         In  addition,  uncertainty  in the United  States  surrounding  utility
deregulation has delayed U.S. utility firms from signing pre-launch  commitments
for the Company's services and from investing in our meter reading system.

         Based  upon  these  financing  difficulties,  management  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 target 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  has  initiated  efforts  to reduce  the
overall  cost of our  system  and  thereby  reduce the  investment  required  to
commence commercial service.

         The difficulties facing the satellite industry as a whole have also led
to delays in raising short-term  operating capital. The Company's right to raise
capital by selling  common shares to the Tourneaux  Fund has been limited by the
Company's  stock price,  which,  as of October 31, 2000 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  delayed  payroll to its  employees.  As of
September 30, 2000, the Company's Cash and cash equivalents  amounted to $24,287
while its Accounts Payable and Accrued  liabilities,  including  amounts owed to
employees, amounted to $2,811,036. Throughout the year, management has continued
to focus on  reducing  operating  expenses  while  concentrating  its efforts on
raising short term and strategic financing. (See "Subsequent Events").

                                       10
<PAGE>


         We continue to seek to satisfy  our fiscal  2000 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.  Through September 30,
2000 we  issued  35,897  shares of the  Company's  Series A  preferred  stock in
exchange for gross  proceeds of  $1,076,910 in cash and the Company has received
$251,318  in options and  warrants  exercised.  The  Company  has also  received
$360,482 through the private sale of common stock.


Revenues

         The  Company  remains  in the  development  stage and did not  generate
revenues  in  either  the  three or nine  months  ended  September  30,  2000 or
September 30, 1999.

Operating Expenses

         Total operating  expenses for the three months ended September 30, 2000
and 1999, were $2,800,420 and $2,207,258 respectively.  Total operating expenses
for the nine months  ended  September  30, 2000 were  $6,355,388  as compared to
$4,243,281 for the nine months ended September 30, 1999. These costs 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  September 30, 2000 were $235,288  (8.4% of operating
expenses). Marketing and sales expenses for the three months ended September 30,
1999 were  $297,791  (13.5% of  operating  expenses).  For the nine months ended
September 30, 2000,  marketing and sales  expenses  totaled  $902,260  (14.2% of
operating expenses). For the nine months ended September 30, 1999, marketing and
sales expenses totaled $297,791 (7.2% of operating  expenses).  This increase in
expenses is due to the establishment of our dedicated  marketing and sales group
in June 1999.

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 three months ended  September 30, 2000 and 1999
were  $2,383,578  (85.1%  of  operating  expenses),  and  $1,453,861  (65.9%  of
operating  expenses)  respectively.  The increase of  $1,903,111  to  $5,033,771
(79.2% of operating  expenses)  during the nine months ended September 30, 2000,
compared to  $3,130,660  (73.8% of operating  expenses) in the nine months ended
September 30, 1999, was primarily due to increased  personnel related costs, and
increased  consulting fees primarily related to our fundraising  activities.  In
addition,  in the quarter  ending  September  2000,  $733,500 of deferred  stock
offering costs were expensed.

Research and Development Expenses

         Research  and  development  expenses  represent  non-capitalized  costs
incurred to develop our system.  Research and development expenses for the three
months  ended  September  30,  2000 and 1999 were  $181,554  (6.5% of  operating
expenses), and $455,606 (20.6% of operating expenses) respectively. The decrease
of $395,473  to $419,357  (6.6% of  operating  expenses)  during the nine months
ended September 30, 2000,  compared to $814,830 (19.3% of operating expenses) in
the nine months ended  September  30, 1999,  was  primarily due to a decrease in
consulting expenses of $163,000.

                                       11
<PAGE>


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 and service providers. 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.  As of December 31,
1999 the Company had amortized $957,755 of this expense.  The Company recognized
a total of $690,345 as non-cash  stock  compensation  expense in the nine months
ended  September 30, 2000. The Company  recognized  $710,477 in the three months
ended September 30, 1999.

Other Income (Expense)

         The  Company  experienced  a  non-operating  gain of $270 for the three
months ended  September 30, 2000, as compared to a gain of $25,804 for the three
months ended  September 30, 1999. The Company had a  non-operating  gain of $476
for the nine months ended  September 30, 2000, as compared to a gain of $101,453
for the nine months ended September 30, 1999. The reduced gains incurred in 2000
were a result of the  reduction in net interest due to the reduction of cash and
cash equivalents.

Net Loss

         The  Company's  net loss for the three months ended  September 30, 2000
was $2,800,150  compared to $2,181,454 for the three months ended  September 30,
1999.  Net loss for the nine months  ended  September  30,  2000 was  $6,354,912
compared to a net loss of  $4,141,828  for the nine months ended  September  30,
1999.


Liquidity and Capital Resources

         The Company has been in the  development  stage since its inception and
has not  recognized  any  significant  revenues.  Our monthly cash  expenditures
averaged approximately $324,000 per month during the third quarter of 2000 which
included approximately $78,000 per month for marketing and sales,  approximately
$185,000 per month for finance,  legal,  administrative  and general  management
expenses and  approximately  $61,000 per month for E-SAT research & development.
Additional  capital will be necessary to expand  operations or continue  current
operations, which will result in further dilution to our stockholders. We cannot
be certain that additional  funding will be available on acceptable  terms or at
all.

         Traditionally,  we have relied on equity and debt placements to finance
our operations. This financing was supplemented from the sale of our interest in
entities that held direct broadcast  satellite  licenses.  We no longer have any
interest in direct broadcast satellite licensees.

         During the nine months ended  September 30, 2000, we received  proceeds
from the sale of common and preferred  stock  totaling  $1,688,710  before stock
issuance costs of $103,315.  These transactions  included a private placement of
35,897 shares of the Company's  Series A preferred stock at $30 per share for an
aggregate amount of $1,076,910 before stock issuance costs of $91,666; a private
placement of 166,298 shares of the Company's common stock at $1.00 per share for
an aggregate of $166,298 before stock issuance costs of $11,641;  133,333 shares
of the Company's common stock at $0.75 per share for an aggregate of $100,000; a
draw down of Equity  1-A for  84,490  shares of the  Company's  common  share at
$0.9863 for an aggregate of $83,333; and proceeds in the amount of $254,530 from
the exercise of 271,870 options and warrants.

                                       12
<PAGE>


         In addition to the above,  the Company also  received  $10,851 from the
sale of 7,451 shares of common stock to employees  pursuant to the 1999 Employee
Stock  Purchase Plan for the offering  periods ended  December 31, 1999 and June
30, 2000.  The proceeds were used  primarily to fund our satellite  construction
costs and financing activities

         We had cash and cash  equivalents  of $24,287 and  $1,205,454 as of the
nine months  ended  September  30, 2000 and 1999  respectively.  We had negative
working  capital of  $3,077,810  as of September  30, 2000,  compared to working
capital of $941,527 as of the nine months ended September 30, 1999. 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  nine  months  ended
September 30, 2000 was $1,687,205, as compared to $2,004,167 for the nine months
ended  September 30, 1999. The $1,687,205  results from a net loss of $6,354,912
offset  primarily by (1) non-cash  stock  compensation  of $690,345 (2) non cash
warrants issues of $1,109,651,  (3) an increase in accounts  payable and accrued
liabilities  of  $2,242,496   arising  from  increased   marketing  and  general
administrative  expenses  and (4) a decrease  in accounts  receivable  and other
current  assets of $5,500 due to a reduction in prepaid  insurance  and employee
receivables.

         Net  cash  used in  investing  activities  for the  nine  months  ended
September  30, 2000,  was  $156,848  compared to  $13,487,344  for the same nine
months ended  September 30, 1999.  This was a decrease of  $13,330,496  over the
nine month period ending September 30, 1999, which was as a result of a decrease
in satellite construction costs.  Approximately $154,000 of the net cash used in
investing activities during the nine months ended September 30, 2000 was related
to satellite construction payments made to our satellite contractors in Europe.

         Net cash  provided by  financing  activities  for the nine months ended
September 30, 2000,  was $1,585,395  compared to  $15,405,254  for the same nine
months ended  September  30,  1999.  Net cash  provided by financing  activities
during the nine months ended September 30, 2000 was related primarily to the net
proceeds  from the sale of units of preferred  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.

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 September
30, 2000, 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 system,  and, if  implemented,  to develop a  sufficiently  large
customer base to be profitable.

                                       13
<PAGE>


         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 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  which  is not  currently
available.

         Other factors,  in addition to those  identified in this report,  which
could affect future  results would include the  dependence  and  uncertainty  of
utility  companies or other commercial  customers to utilize such data messaging
service,  the  reliance  on third  parties  for the  advancement  of the design,
manufacturing  and marketing of the E-SAT 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 (including but not limited to FCC approval of
our transfer of control of E-Sat,  Inc. from  EchoStar),  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 the  Company's  activities in the
Little  LEO   satellite   technology,   unscheduled   delays  or   technological
difficulties,  satellite launch risks, potential satellite malfunction,  limited
availability  of  insurance,  results of the  Company's  financing  efforts  and
marketing  conditions,  competition,  and  other  risk  factors  related  to the
Company's  business.  Readers  of this  report  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 and in the Company's SB-2 document filed
with the Securities and Exchange Commission on August 10, 2000, 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 the  Company's
stock  and  could  cause  such  stock  prices to  fluctuate  significantly  over
relatively short periods of time.


Impact of the Year 2000 Issue

         As of November 1, 2000, we had not  encountered  any material year 2000
problems  with the  hardware and software  systems  used in our  operations.  In
addition,  none of our  critical  vendors have  reported any material  year 2000
problems  nor have we  experienced  any  decline  in  service  levels  from such
vendors.

         We expect to continue to monitor  internal and external  issues related
to year 2000. While no material problems have been discovered,  we cannot assure
you that material problems will not materialize in the future.


                                       14
<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None.

ITEM 2.  RECENT SALES IN UNREGISTERED SECURITIES

(a)      During the nine months ended  September  30, 2000,  the Company sold an
         aggregate of 35,897 shares of its Series A Convertible  Preferred Stock
         at $30 per share, for an aggregate placement of $1,076,910.  The shares
         of preferred  stock have a  liquidation  preference of $30.00 per share
         and were initially  convertible,  at the option of the holder, into ten
         shares of our common stock, or at a rate of $3.00 per common share. Per
         the conversion  terms,  the conversion rate was adjusted based upon the
         5-day average closing price of the Company's  common stock three months
         after the shares were issued,  because the  Company's  common stock was
         trading below $3.00 per share.  Commissions  were paid to one placement
         agent in the aggregate amount of approximately  $7,000,  plus a warrant
         was  issued  in July 2000 to the  placement  agent to  purchase  57,586
         shares of common  stock at the exercise  price of $3.00 per share.  The
         offers  and  sales  were  made by the  Company  in  reliance  upon  the
         exemption from registration  provided by Section 4(2) of the Securities
         Act. During the three months ended September 30, 2000, 29,728 shares of
         common  stock were  issued to one  investor  upon  conversion  of 1,666
         shares of preferred stock.

(b)      On June 2, 2000,  the Company  entered into an agreement to sell shares
         of its Common  Stock,  at the  Company's  option,  to Torneaux  Ltd., a
         corporation  organized in the Bahamas. No commission was paid, however,
         the Company  issued a Warrant to purchase  250,000 shares of its Common
         Stock at an exercise  price of $1.01 per share as a finder's  fee.  The
         transaction was exempt from  registration in reliance upon Section 4(2)
         of the Securities Act. During the three months ended September 30, 2000
         the Company  sold  84,490  shares of common  stock to Torneaux  Ltd. in
         accordance  with the  agreement,  resulting  in gross  proceeds  to the
         Company of $83,333  and issued a warrant to purchase  42,245  shares of
         common stock at an exercise price of $1.1342 per share.

(c)      On July 25, 2000,  the Company sold 133,333  shares of its Common Stock
         to an  accredited  investor.  The  stock  was sold  for $.75 per  share
         resulting in gross  proceeds to the Company of  $100,000.  In addition,
         the Company  issued a warrant to purchase  10,000  shares of its common
         stock at $.75 per share.  transaction  was  performed by the Company in
         reliance upon the exemption from registration  provided by Section 4(2)
         of the Securities Act.

(d)      In August 2000, the Company granted a warrant to purchase 49,000 shares
         of its Common Stock to a consultant for past services.  The warrant has
         an exercise price of $0.9062 per share. The transaction was exempt from
         registration in reliance upon Section 4(2) of the Securities Act.

(e)      In  August  2000,  the  Company  granted  to an  employee  an option to
         purchase 120,000 shares of Common Stock at $.9062 per share.

(f)      In August 2000 a warrant to purchase 125,000 shares of common stock was
         exercised by an investor at a reduced exercise price of $.70 per share.
         A new warrant to purchase  125,000 shares of common stock was issued to
         the same  investor  at an  exercise  price of $1.1875  per  share.  The
         transaction was exempt from  registration in reliance upon Section 4(2)
         of the Securities Act.

(g)      In  September  2000 the Company  granted a warrant to purchase  200,000
         shares of its  common  stock to a  consultant  as part of an  agreement

                                       15
<PAGE>

         dated  September 8, 2000. No commissions  were paid. The warrant has an
         exercise price ranging from $1.50 to $2.50 per share.  The  transaction
         was  exempt  from  registration  in  reliance  upon  Sec.  4(2)  of the
         Securities Act.










ITEM 6.

         (a)    Exhibits:

                3.4    Certificate  of   Designation,   creating  the  Series  B
                       Convertible Stock
                10.58  Stock purchase agreement dated June 2, 2000 with Courtney
                       Benham
                10.59  Stock purchase  agreement  dated June 2, 2000 with Codera
                       Wine Group Profit Sharing Plan
                10.60  Stock purchase  agreement dated June 2, 2000 with Patrick
                       Watt House Living Trust
                10.61  Stock purchase agreement dated July 25, 2000 with Barbara
                       J. Drew

                27.1  Financial Data Schedule

         (b)    Reports on Form 8-K:  none




                                       16
<PAGE>

                                   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:  November 10, 2000      By:  /S/FRED W. THOMPSON
                                            -------------------------------
                                            FRED W. THOMPSON
                                            President

                                       By:  /S/STANTON C. LAWSON
                                            -------------------------------
                                            STANTON C. LAWSON
                                            Director Principal Financial Officer




                                       17