SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549

                                 FORM 10-Q

                 Quarterly Report Pursuant to Section 13 or 15 (d) of the
                    Securities and Exchange Act of 1934



          For the Quarter Ended                         Commission File Number

                February 28, 2000                            0-12423



                                        MERIT DIVERSIFIED INTERNATIONAL, INC.
                      (Exact name of registrant as specified in its charter)

             Nevada                                  94-2906927
(state or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                     Identification No.)



                                 1801 Avenue of the Stars, Los Angeles, Ca 90067
                                  (Address of principal executive offices)


        Registrants telephone number, including area code:       (310) 552-0870



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
such filing requirements for the past 90 days.

       Yes                                     No       X

The number of shares outstanding of each of the registrants classes of common
stock, as of February 28, 2000 was 30,042,257 shares, all of one class of $.00
par value Common Stock.

<PAGE>



                      MERIT DIVERSIFIED INTERNATIONAL, INC.
                                  FORM 10-Q
                       Quarter Ended February 28, 2000
                              TABLE OF CONTENTS

FINANCIAL INFORMATION                                                  PAGE

Item 1-  Consolidated Financial Statements

                Consolidated Balance Sheets as of February 28, 2000
         and August 31, 1999                                            3

                Consolidated Statements of Operations for the three
         months ended February 28, 2000 and February 29, 1999           4

                Consolidated Statements of Operations for the six months
                ended February 28, 2000 and February 29, 1999           5

                Consolidated Statements of Cash Flows for the three months
                       ended February 28, 2000 and February 29, 1999    6

                Notes to Consolidated Financial Statements            7,8

Item 2-         Managements Discussion and Analysis of Financial
                       Condition and Results of Operations           9-11

OTHER INFORMATION

Item 1-         Legal Proceedings                                    12

Item 2-         Changes in Securities                                12

Item 3-         Defaults upon Senior Securities                      12

Item 4-         Submission of Matters to a Vote of Security Holders  12

Item 5-         Other Information                                    12

Item 6-  Exhibits and Reports on Form 8-K                            12


SIGNATURES                                                           13



<PAGE>


                      MERIT DIVERSIFIED INTERNATIONAL, INC.
                         (A Developmental Stage Company)
                          PART 1: FINANCIAL INFORMATION
                           CONSOLIDATED BALANCE SHEETS
                    AS OF FEBRUARY 28, 2000 AND AUGUST 31, 1999

                                 February 28,                August 31,
                                  2000                        1999
                                 (Unaudited)                  (Note 1)

Assets                              $  70,000                 $       -

Total Assets                        $  70,000                 $       -


Liabilities and Shareholders Equity

Current liabilities

  Accounts and taxes payable        $  -                       $     -

Total current liabilities              -                             -

Commitments

Shareholders Equity

     Common Stock-no par value;
 50,000,000 shares authorized,
 30,042,257 issued and outstanding
 as of February 28, 2000 and
 August 31, 1999                    1,333,229                   1,332,349

  Additional paid-in capital        1,199,335                   1,122,215

  Accumulated deficit-accumulated
  during the developmental stage   (2,462,564)                  (2,462,564)

Total shareholders equity          $   70,000                   $      -

Total liabilities and
shareholders equity                $   70,000                   $       -





See Notes to Consolidated Financial Statements



<PAGE>



                 MERIT DIVERSIFIED INTERNATIONAL, INC.
                   (A Developmental Stage Company)

                CONSOLIDATED STATEMENTS OF OPERATIONS
            THREE MONTHS ENDED FEBRUARY 28, 2000 AND 1999

                           (UNAUDITED)
<TABLE>
<S>
<S>

                           Three Months       Three Months       Since Being
                              Ended           Ended                 A
                            February 28,    February 29,        Developmental
                             2000             1999             Stage Company
                            (Note 1)

Net revenue                $       -        $       -          $      -

Costs and expenses:

  General and administrative       -                -              2,244,147
  Depreciation and amortization    -                -                  6,200

Income (loss) from operations $     -               -          $  (2,250,347)

Other income (expense):

  Interest expense                  -               -               (22,518)
  Loss on sale of fixed assets      -               -                  (918)
  Loss on sale of investments       -               -              (269,800)
  Income from debt adjustment       -               -                86,419

Total other income (expense)        -               -              (206,817)

Income before taxes
 on income                          -               -            (2,457,164)

Taxes on income                     -               -                 5,400

Net income (loss)                   -               -            (2,462,564)

Net income (loss) per share        nil             nil

Weighted average number of shares
  and share equivalents
  outstanding                 30,052,257      30,042,257



</TABLE>


See Notes to Consolidated Financial Statements


<PAGE>


                    MERIT DIVERSIFIED INTERNATIONAL, INC.
                      (A Developmental Stage Company)
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                SIX MONTHS ENDED FEBRUARY 28, 2000 AND 1999
                               (UNAUDITED)
<TABLE>
<S>
<S>


                           Six Months       Six Months       Since Being
                             Ended            Ended               A
                           February 28,    February 28,    Developmental
                             2000              1999        Stage Company
                           (Note 1)

Net revenue               $       -        $       -        $       -

Costs and expenses:

  General and administrative      -                -           2,244,147
  Depreciation and amortization   -                -               6,200

Income (loss) from operations $   -                -      $   (2,250,347)

Other income (expense):

  Interest expense                -                -             (22,518)
  Loss on sale of fixed assets    -                -                (918)
  Loss on sale of investments     -                -            (269,800)
  Income from debt adjustment     -                -              86,419

Total other income (expense)      -                -            (206,817)

Income before taxes
 on income                        -                -          (2,457,164)

Taxes on income                   -                -               5,400

Net income (loss)                 -                -          (2,462,564)

Net income (loss) per share      nil              nil

Weighted average number of shares
  and share equivalents
  outstanding               30,042,257       30,042,257


</TABLE>


See Notes to Consolidated Financial Statements


<PAGE>



                 MERIT DIVERSIFIED INTERNATIONAL, INC.
                     (A Developmental Stage Company)

                 CONSOLIDATED STATEMENTS OF CASH FLOWS
            THREE MONTHS ENDED FEBRUARY 28, 2000 AND 1999
                              (UNAUDITED)

Increase (Decrease) in Cash and Cash Equivalents

                                        Three Months          Three Months
                                           Ended                 Ended
                                        February 28,          February 28,
                                            2000                  1999


Operating activities:

  Net income (loss)                    $       -              $       -
  Adjustments to reconcile net loss
    to cash used in operating activities:
    Amortization expense                       -                      -
  Changes in operating assets and
     liabilities:
    Accounts payable                           -                   (8,000)
Cash provided by (used in)
 operating activities                         -                    (8,000)
Investing activities:                         -                       -
Financing activities:
  Contribution by shareholder                 -                    (8,000)
  Loan proceeds                               -                       -
  Issuance of capital stock                   -                       -
Cash provided by financing
 activities                                   -                     8,000
Net increase (decrease) in
 cash and cash equivalents                    -                       -
Cash and cash equivalents,
 beginning of period                          -                       -
Cash and cash equivalents,
 end of period                        $       -                    $  -



See Notes to Consolidated Financial Statements


<PAGE>



                   MERIT DIVERSIFIED INTERNATIONAL, INC.
                     (A Developmental Stage Company)
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           FEBRUARY 28, 2000

Note 1 - Basis of Presentation


The accompanying consolidated financial statements have been prepared in
accordance with United States generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X.  Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.  In the opinion of management, all
adjustments considered necessary for a fair presentation have been included.
Operating results for the three months ended February 28, 2000 are not
necessarily indicative of the results that may be expected for the year ended
August 31, 2000.  For further information, refer to the consolidated
financial statements and footnotes thereto included in the Companys Form
10-K for the year ended August 31, 1999.

Note 2 - Net Income (Loss) Per Share


Net income (loss) per share and common equivalent share is computed using the
weighted average number of shares outstanding during each period.

During April, 1996, the Board of Directors declared a reverse stock split,
reducing the number of common shares outstanding through the distribution of
one common share in exchange for twenty (20) common shares held by
shareholders of record as of April 30, 1996.  All references to common
share and per share amounts in the accompanying financial statements have
been retroactively adjusted to reflect the effect of this transaction.

Note 3- Related Party Transactions


The Company has been able to continue in existence and reduce its debts and
obligations through the assistance of certain major shareholders who continue
to fund the Companys general and administrative expenses and to pay
outstanding obligations.  There can be no assurance that these shareholders
will continue such funding in the future.

Note 4- Going Concern


The Company has incurred significant losses since its inception and as of
February 28, 2000, has no source of revenue.  The Company has no cash and has
maintained its existence and paid ongoing expenses through the issuance of
common stock.

<PAGE>


                  MERIT DIVERSIFIED INTERNATIONAL, INC.
                    (A Developmental Stage Company)
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                         FEBRUARY 28, 2000


The Company has been able to continue because major shareholders have continued
to invest in the Company to meet its expenses.  As of February 28, 2000,
the Company has been successful in converting most of its debt to equity.

The Company is considered a development stage Company and will remain in this
status until operations begin.  There can be no assurance that the Company will
be able to merge with an operating company, acquire an ongoing business, or
that the major shareholders will continue to pay the expenses of the Company.

Note 5 - Investments

During the quarter ended February 28, 2000 the Company issued 20,000 shares in
exchange for the rights to several domain names to be used on the World Wide
Web. The transaction was valued at the average trading price of company shares
for the six months preceding the transaction, which was approximately $3.50
per share.

<PAGE>








(Balance of Page Left Blank Intentionally)






<PAGE>



                       MERIT DIVERSIFIED INTERNATIONAL, INC.
                         (A Developmental Stage Company)
                               FEBRUARY 28, 2000


Item 2 - Managements Discussion and Analysis of Financial Condition and
           Results of Operations or Plan of Operation


The following review concerns the three and six month periods ended February
28, 2000 and February 28, 1999, which should be read in conjunction with
the financial statements and notes thereto presented in the Form 10-Q.

The information set forth in Managements Discussion and Analysis of Financial
Condition and Results of Operations below includes forward looking statements
within the meaning of Section 27A of the Securities Act, and is subject to the
safe harbor created by that section.  Factors that could cause actual results
to differ materially from these contained in the forward looking statements are
set forth in Managements Discussion and Analysis of Financial Condition and
Results of Operations.

Plan of operation.

The Company has continued its efforts to acquire, merge with or enter into
another form of business combination with another entity, and the Company plans
to continue these efforts in the current fiscal year.  It is presently unknown
whether any transaction will be concluded. The Company considers it current
cash and cash equivalent balances inadequate to satisfy its cash requirements
for the next twelve months.  Legal and accounting and other expenses required
could increase significantly in connection with any contemplated business
combination.  The Company may not have the liquidity and capital resources to
consummate such business combination.  Due to the nature of the Companys
present activities, however the Company is unable to predict its likely
expenditure for professional fees and other expenses.  The Company has no
major capital commitments nor access to mechanisms to fund working or operating
capital, and there can be no assurance that it will be successful in its
efforts to raise additional capital to maintain its plan of operation.

During the quarter ended February 28, 2000 the Company acquired the rights to
several domain names on the World Wide Web in exchange for shares of its
common stock. Among the names acquired were MP3Entertainment.com and
MP3hits.com.  These acquisitions are significant to the long term strategy
of the company to be able to keep pace with emerging technologies and
to effectively exploit new markets.

<PAGE>

Results of Operations Three and Six Months Ended February 28, 2000 and
February 28, 1999

The Company has no assets and has not engaged in any operational activities
during the past four years.  At present, the Company has no employees.   The
Company does not expect any changes in its operations unless the Company
concludes a merger or other business combination.

During the three months ended February 28, 2000, the Company had no
operations.  The Company maintained its existence through contributions from
its shareholders to satisfy its general and administrative expenses.  As
detailed on the accompanying consolidated statements of cash flows, there were
no significant adjustments between the net loss and net change in cash.

<PAGE>


                    MERIT DIVERSIFIED INTERNATIONAL, INC.
                    (A Developmental Stage Company)
                           FEBRUARY 28, 2000

Item 2 - Managements Discussion and Analysis of Financial Condition and
                Results of Operations or Plan of Operation (Continued)


As stated above in the Plan of Operation, due to the nature of the Companys
activities, the Companys prospects for the future are dependent on a number of
variables which cannot be predicted.  Generally, after identifying a potential
business opportunity, the Company could incur significant costs in evaluating
the desirability of an acquisition or other form of business combination.
Should the Company determine to proceed with the business combination, the
transaction costs could be significant.  Thereafter, results of operation would
likely be materially affected by the business acquired or merge with the
Company.

Recent accounting pronouncements:  On March 3, 1997, the Financial Accounting
Standards Board (FASB) issued the Statement of Financial Accounting Standards
SFAS) No. 128, Earning Per Share.  This pronouncement provides a different
method of calculating earnings per share than is currently used in accordance
with Accounting Principles Board Opinion No. 15, Earnings Per Share.  SFAS No.
128 provides for the calculation of Basic and Diluted earnings per share.
Basic earnings per share includes no dilution and is computed by dividing
income available to common shareholders by the weighted average number of
common shares outstanding for the period.  Diluted earnings per share
reflects the potential dilution of securities that could share in the
earnings of an entity, similar to fully diluted earnings per share.  The
Company will adopt SFAS No. 128 in the fiscal 1998 and its implementation
is not expected to have a material effect on the financial statements.

In June 1997, FASB issued SFAS No. 130, Reporting Comprehensive Income which
establishes standards for reporting and display of comprehensive income, as
components and accumulated balances.  Comprehensive income is defined to
include all changes in equity except those resulting from investments by
owners and distributions to owners.  Among other disclosures, SFAS No. 120
required that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.

<PAGE>

Item 2 - Managements Discussion and Analysis of Financial Condition and
                Results of Operations or Plan of Operation (Continued)


Also, in June 1997, FASB issued SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information which supersedes SFAS No. 14, Financial
Reporting for Segments of a Business Enterprise.  SFAS No.131 establishes
standards for the way that public companies report information bout operating
segments in annual financial statements and required reporting of selected
information about operating segments in interim financial statements issued to
the public.  It also establishes standard for disclosure regarding products and
services, geographic areas and major customer.  SFAS No. 131 defines operating
segments as components of a company about which separate financial information
is available that is evaluated regularly by the chief operating decision maker
in deciding how to allocate resources in assessing performance.


Both SFAS No. 130 and 131 are effective for financial statements for periods
beginning after December 15, 1997 and require comparative information for
earlier years to be restated.  Because of the recent issuance of these
standards, management has been unable to fully evaluate the impact, if any,
they may have on future financial statement disclosures.  Results of
operations and financial position, however, will be unaffected by
implementation of these standards.




(Balance of Page Left Blank Intentionally)

<PAGE>


                     MERIT DIVERSIFIED INTERNATIONAL, INC.
                        (A Developmental Stage Company)
                                FEBRUARY 28, 2000


Item 1                  Legal Proceedings

                                None

Item 2                  Change in Securities

                                None

Item 3                  Defaults 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

                                None

<PAGE>




                      MERIT DIVERSIFIED INTERNATIONAL, INC.
                        (A Developmental Stage Company)

           SIGNATURES


Pursuant to the requirements of Section 13 of 15(d) 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.



        MERIT DIVERSIFIED INTERNATIONAL, INC.
        (Registrant)




Date:  March 13, 2000         By :__________________/s/__________________

                                  Dwight Mallette, Secretary, Chief Accountant