SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10QSB


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


For Quarter Ended                                 Commission File Number
-----------------                                 ----------------------
February 28, 2001                                       000-21210



                                   NELX, INC.
                       ----------------------------------
             (Exact name of registrant as specified in its charter)


            COLORADO                                       84-0922335
--------------------------------                        -------------------
     (State of incorporation)                           (I.R.S. Employer
                                                        Identification No.)

                   10525 W. 23rd Place, Lakewood, CO        80215
            ---------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (304) 622-9599


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least 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.

                45,802,042 common shares as of February 28, 2001

<PAGE>

I.  FINANCIAL STATEMENTS


<TABLE>
<CAPTION>

                                           NELX, INC.
                                   Consolidated Balance Sheet
                                           (Unaudited)

                                                                      February                     May
                                                                      28, 2001                   31, 2000
                                                                      --------                   --------
<S>                                                                    <C>                       <C>

ASSETS

Current Assets
     Cash                                                                $ 11,015                    $ 1,521


     Investment in Undeveloped Mineral Lease                              131,175                    131,175
     Less Accumulated Amortization                                        (13,387)                    (9,517)
                                                                          --------                    -------
                                                                          117,788                    121,658

TOTAL ASSETS                                                             $128,803                   $123,179
                                                                   ===============            ===============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
     Settlement Payable                                                  $ 24,255                   $ 24,255
     Advances From Shareholder                                             34,150                     66,650
                                                                          -------                    ------
          Total Current Liabilities                                        58,405                     90,905

Stockholders' Equity
     Common Stock. $0.0001 par value, 500,000,000 shares
     authorized, 45,802,042 issued and outstanding                          4,580                      4,580
     Additional paid-in capital                                         7,718,330                  7,718,330
     Accumulated Deficit                                               (7,652,512)                (7,690,635)
                                                                       -----------                -----------
TOTAL STOCKHOLDERS' EQUITY                                                 70,398                     32,274
                                                                           -------                    ------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               $128,803                   $123,179
                                                                   ===============            ===============

</TABLE>


                                      F-1

<PAGE>

<TABLE>
<CAPTION>


                                           NELX, INC.
                              CONSOLIDATED STATEMENT OF OPERATIONS
                                           (Unaudited)

                                                   For the Three Months ended                For the Nine Months ended
                                                          February 28,                              February 28,

                                                   2001                 2000                 2001                 2000
                                                   ----                 ----                 ----                 ----
<S>                                               <C>                  <C>                  <C>                  <C>
REVENUES
     Gain on sale of securities                      $ 3,350                                  $ 60,000

EXPENSES
     General and administrative                        1,494                1,500               18,007                7,093
     Amortization                                      1,290                  177                3,870                    -
     Interest                                             -                    -                    -                  500
                                               --------------        ------------          -----------        --------------
Total Operating Expenses                               2,784                1,677               21,877                7,593

NET INCOME (LOSS)                                      $ 566             $ (1,677)            $ 38,123             $ (7,593)
                                               ==============       ==============       ==============       ==============

BASIC AND DILUTIVE INCOME (LOSS)                      $ 0.00              $ (0.00)              $ 0.00              $ (0.00)
                                               ==============       ==============       ==============       ==============
PER SHARE

WEIGHTED AVERAGE SHARES OUTSTANDING               45,802,042           44,352,042           45,802,042           46,352,042
                                               ==============       ==============       ==============       ==============

</TABLE>

                                      F-2

<PAGE>

<TABLE>
<CAPTION>


                                                   NELX, INC.
                                      Consolidated Statement of Cash Flows
                                                   (Unaudited)

                                                               Nine Months                          Three Months
                                                            Ended February 28,                    Ended February 28,
                                                          2001              2000                2001              2000
                                                          ----              ----                ----              ----
<S>                                                       <C>               <C>                 <C>               <C>
Cash Flows from Operating Activities:
     Net Profit (Loss)                                    $ 38,123          $ (7,593)              $ 566          $ (1,677)
     Amortization                                            3,870                                 1,290
     Gain on sale of securities                            (60,000)                               (3,350)
     (Decrease) Increase in Accounts Payable                     -                 -                   -             1,000
                                                      -------------      ------------       -------------      ------------
Net Cash Flows Used for Operating Activities               (18,007)           (7,593)             (1,494)             (677)

Cash Flows from Investing Activities
     Proceeds from sale of securities                       60,000                 -               3,350                 -
                                                      -------------      ------------       -------------      ------------
Net Cash (Used by) From Investing Activities                60,000                 -               3,350                 -

Cash Flows from Financing Activities
     Repayment of advances from shareholder                (32,500)            4,000             (18,000)            3,000
     Sale of Common Stock                                        -             6,500                   -            (1,000)
                                                      -------------      ------------       -------------      ------------
Total Cash from (Used by) Financing Activities             (32,500)           10,500             (18,000)            2,000
                                                      -------------      ------------       -------------      ------------
Increase (Decrease) in Cash                                  9,493             2,907             (16,144)            1,323

Cash and Cash Equivalents - Beginning of Period              1,521              254               27,158            1,838
                                                      -------------      ------------       -------------      ------------

Cash and Cash Equivalents - End of Period                 $ 11,014           $ 3,161            $ 11,014           $ 3,161
                                                      =============      ============       =============      ============

</TABLE>

                                      F-3

<PAGE>

<TABLE>
<CAPTION>


                                              NELX, INC.
                            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                           November 30, 2000

                                                    Common Stock               Additional
                                                                               Paid - In        Accumulated
                                             # of Shares        Amount          Capital           Deficit
                                          --------------------------------------------------------------------
<S>                                              <C>               <C>            <C>             <C>

Balance at May 31, 2000                          45,802,042        $ 4,580        $ 7,718,330     $(7,690,635)

  Net Income                                                                                           38,123
                                          --------------------------------------------------------------------
Balance at February 28, 2001                     45,802,042        $ 4,580        $ 7,718,330        $ 38,123
                                          ====================================================================

</TABLE>

                                      F-4


<PAGE>

NELX, INC.
Notes to Condensed Consolidated Financial Statements

Note A - Organization and Business

NELX, INC. (the  "Company,") was incorporated in Kansas on March 25, 1983. As of
November 30, 2000, the Company had no business  operations.  Its principal asset
is a leasehold  interest in an undeveloped  mineral spring in Arkansas.  On July
26,  2000,  the Company  entered  into an agreement to acquire all of the common
stock of a West Virginia  corporation  in the business of producing  dimensional
lumber,  crossties and  landscaping  timber.  On December 29, 2000 at a board of
directors  meeting the agreement was rescinded due to the lack of  profitability
of the  corporation  to be  acquired.  Along with this  recission  My. Ken Curry
submitted his resignation as a director of the Company.  It is anticipated  that
there will be no legal or financial repercussions due to this recission.

The accompanying  unaudited condensed financial statements have been prepared in
accordance  with the  instructions  to Form 10-QSB and do not include all of the
information and notes required by generally accepted  accounting  principles for
complete  financial  statements.  In the  opinion of  management,  all  material
adjustments,   consisting  of  only  normal  recurring  adjustments   considered
necessary for a fair presentation,  have been included.  These statements should
be read in conjunction with the financial  statements and notes thereto included
in the Company's Form 10-KSB for the year ended May 31, 2000.

The financial  statements include the accounts of Crystal Mountain Water, Inc. a
wholly owned  subsidiary.  All intercompany  transactions and balances have been
eliminated.

The results of operations  for the nine months ended  February 28, 2001, are not
necessarily indicative of results for the remainder of fiscal 2001.

Note B - Earnings (Loss) Per Share

Basic earnings  (loss) per share of common stock are computed using the weighted
average number of shares  outstanding  during each period plus common equivalent
shares (in periods in which they have a dilutive effect.)

Note C - Sale of Securities

During the second  quarter of fiscal  2001,  the Company  sold all its shares of
common stock in a corporation which did not have any carrying cost.

                                      F-5



<PAGE>



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

RESULTS OF OPERATIONS

The Company has experienced  $21,877  expenses for the nine month period in 2001
and $7,593 for the nine month  period in 2000.  The Company had revenues in 2001
of $60,000 against no revenues in 2000. The Company will continue to have losses
until  adequate  income can be achieved to meet  expenses.  While the Company is
seeking capital  sources for investment;  there is no assurance that sources can
be found.

LIQUIDITY AND CAPITAL RESOURCES

The  Company  had  $11,015 in cash  capital at the end of the period and current
liabilities  exceeded  current assets by $47,390.  The Company will be forced to
either borrow or make private  placements of stock in order to fund  operations.
No  assurance  exists  as to the  ability  to  achieve  loans  or  make  private
placements of stock.



<PAGE>


                           PART II - OTHER INFORMATION


ITEM 1.           LEGAL PROCEEDINGS

                  None

ITEM 2.           CHANGES IN SECURITIES

                  None

ITEM 3.           DEFAULT UPON SENIOR SECURITIES

                  None

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

                  None

ITEM 5.           OTHER INFORMATION

                  None

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                        Reports on Form 8-K were  made for the  period for which
                  this  report is filed:  February 7, 2001.


<PAGE>


                                   SIGNATURES

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

Date:  April 26, 2001



                                              NELX, INC.


                                              /s/ Charles L. Stout
                                              -----------------------------
                                              Charles L. Stout, President