U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB


(Mark One)

    [X]               Quarterly report under Section 13 or
                  15(d) of the Securities Exchange Act of 1934


               For the quarterly period ended September 30, 2000.

    [ ]               Transition report under Section 13 or
                  15(d) of the Securities Exchange Act of 1934

                For the transition period from ______ to ______.


                         Commission file number 0-13803


                            GATEWAY INDUSTRIES, INC.
        (Exact name of Small Business Issuer as Specified in Its Charter)


            DELAWARE                                            33-0637631
(State or Other Jurisdiction of                                (IRS Employer
 Incorporation or Organization)                              Identification No.)


                        150 East 52nd Street, 21st Floor
                               New York, NY 10022
                    (Address of Principal Executive Offices)

                                  877-431-2942
                (Issuer's Telephone Number, Including Area Code)

     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 [ ]

Shares of Issuer's Common Stock Outstanding at September 30, 2000:  4,192,024

Transitional small business disclosure format:        Yes [ ] No [X]
<PAGE>


                     GATEWAY INDUSTRIES, INC. AND SUBSIDIARY


                                      INDEX


                         PART I - FINANCIAL INFORMATION
                                                                            PAGE
<PRE>
Item 1.       Condensed Consolidated Financial Statements (Unaudited):

              Condensed Consolidated Balance Sheet
              September 30, 2000............................................  2

              Condensed Consolidated Statements
              of  Operations - Three Months Ended
              September 30, 2000 and 1999 ..................................  3

              Condensed Consolidated Statements
              of  Operations - Nine Months Ended
              September 30, 2000 and 1999 ..................................  4

              Condensed Consolidated Statements
              of  Cash Flows - Nine Months Ended
              September 30, 2000 and 1999...................................  5

              Notes to Condensed Consolidated Financial Statements..........  6

Item 2.       Management's Discussion and Analysis
              or Plan of Operations.........................................  8


                          PART II - OTHER INFORMATION

Item 6.       Exhibits and Reports on Form 8-K.............................. 10

Signatures.................................................................. 11
</PRE>
<PAGE>



                    GATEWAY INDUSTRIES, INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEET
                               September 30, 2000
                                   (Unaudited)

<TABLE>
<CAPTION>
                                     ASSETS
<S>                                                                               <C>
Current assets:
     Cash and cash equivalents.............................................       $   3,064,000
     Accounts receivable...................................................             767,000
     Prepaid expenses and other............................................              32,000
                                                                                   ------------
         Total current assets..............................................           3,863,000
                                                                                   ------------

Other assets:

     Security deposits.....................................................              48,000
     Property, plant and equipment, net....................................             334,000
     Goodwill and other intangibles, net...................................           3,337,000
                                                                                   ------------
         Total other assets................................................           3,719,000
                                                                                   ------------

Total assets  .............................................................       $   7,582,000
                                                                                  =============




                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities
     Accounts payable and accrued expenses.................................       $     265,000
     Deferred income.......................................................             268,000
     Customer deposits.....................................................             560,000
     Capital lease obligation..............................................               3,000
                                                                                  -------------

         Total current liabilities.........................................           1,096,000
                                                                                  -------------


Shareholders' equity
     Preferred stock, $.10 par value, 1,000,000 shares authorized,
         no shares issued or outstanding...................................                  --
     Common stock, $.001 par value, 10,000,000 shares authorized,
         4,192,024 shares issued (including treasury shares)...............               4,000
     Capital in excess of par value........................................          11,051,000
     Accumulated deficit...................................................          (4,523,000)
     Treasury stock, 11,513 shares of common stock-at cost.................             (46,000)
                                                                                  -------------

         Total shareholders' equity........................................           6,486,000
                                                                                  -------------

Total liabilities and shareholders' equity.................................       $   7,582,000
                                                                                  =============
</TABLE>

                             See accompanying notes.
<PAGE>
                    GATEWAY INDUSTRIES, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                         For the Three Months
                                                                                          Ended September 30,
                                                                                        2000              1999
                                                                                        ----              ----

<S>                                                                               <C>              <C>
Sales......................................................................       $    936,000               --

Cost of sales .............................................................            133,000               --
                                                                                  ------------     ------------

Gross profit  .............................................................            803,000               --


Costs and expenses:

     Payroll expenses......................................................       $    498,000               --
     General and administrative............................................            225,000     $    108,000
     Depreciation and amortization.........................................            144,000               --
     Professional fees.....................................................             35,000               --
     Occupancy.............................................................             33,000               --
                                                                                  ------------     ------------

         Total costs and expenses..........................................            935,000          108,000
                                                                                  ------------     ------------


     Operating loss........................................................           (132,000)        (108,000)

     Other income:

         Interest income...................................................             42,000           58,000
                                                                                  ------------     ------------


Net loss...................................................................       $    (90,000)    $    (50,000)
                                                                                  ============     ============


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

Weighted average number of shares - basic and diluted......................          4,192,024        3,592,024
</TABLE>



                             See accompanying notes.


<PAGE>
                    GATEWAY INDUSTRIES, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                        For the Nine Months
                                                                                        Ended September 30,
                                                                                      2000              1999
                                                                                       ----             ----


<S>                                                                               <C>              <C>
Sales......................................................................       $  1,899,000               --

Cost of sales .............................................................            320,000               --
                                                                                  ------------     ------------

Gross profit  .............................................................          1,579,000               --

Costs and expenses:


     Payroll expenses......................................................       $  1,032,000               --
     General and administrative............................................            643,000     $    309,000
     Depreciation and amortization.........................................            224,000               --
     Professional fees.....................................................            154,000               --
     Occupancy.............................................................             61,000               --
                                                                                  ------------     ------------

         Total costs and expenses..........................................          2,114,000          309,000
                                                                                  ------------     ------------


     Operating loss........................................................           (535,000)    $   (309,000)

     Other income:

         Interest income...................................................            150,000          169,000
         Other income......................................................             19,000           15,000
                                                                                  ------------     ------------

         Total other income................................................            169,000          184,000
                                                                                  ------------     ------------


Net loss...................................................................       $   (366,000)    $   (125,000)
                                                                                  ============     ============


Net loss per share - basic and diluted.....................................       $       (.09)    $       (.03)

Weighted average number of shares - basic and diluted......................          4,014,652        3,592,024
</TABLE>



                             See accompanying notes.


<PAGE>
                    GATEWAY INDUSTRIES, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                          For the Nine Months
                                                                                          Ended September 30,
                                                                                        2000              1999
                                                                                        ----              ----
<S>                                                                               <C>              <C>
Cash flows from operating activities:
     Net loss ..............................................................      $   (366,000)    $  (125,000)

     Adjustments to reconcile net loss to net cash provided by (used  in)
         operating activities:
     Depreciation ..........................................................            70,000               --
     Amortization of goodwill and other intangibles ........................           154,000               --
     Changes in assets and liabilities net of assets and liabilities acquired:
         Accounts receivable ...............................................          (391,000)              --
         Prepaid expenses and other ........................................            77,000           11,000
         Security deposit ..................................................            25,000               --
         Accounts payable ..................................................            (1,000)         (32,000)
         Deferred income ...................................................           268,000               --
         Customer deposits .................................................           560,000               --
                                                                                  -----------      ------------

              Net cash provided by (used in) operating activities ..........          396,000         (146,000)

Cash flows from investing activities:
         Purchase of property, plant, and equipment ........................           (85,000)              --
         Purchase of Oaktree Systems Inc., net of cash acquired ............        (2,693,000)              --
         Note receivable ...................................................                --          566,000
                                                                                  ------------     ------------

              Net cash (used in) provided by investing activities ..........        (2,778,000)         566,000

Cash flows from financing activities:

         Payments of obligation on capital lease ...........................           (19,000)              --
                                                                                  ------------     ------------

     Net cash used in financing activities .................................           (19,000)              --
                                                                                  ------------     ------------

     Net (decrease) increase in cash and cash equivalents ..................        (2,401,000)         420,000
     Cash and cash equivalents at beginning of period ......................         5,465,000        5,140,000
                                                                                  ------------     ------------
     Cash and cash equivalents at end of period ............................      $  3,064,000     $  5,560,000
                                                                                  ============     ============
</TABLE>

Supplemental information:

On March 21,  2000,  the Company  acquired  100% of the common  stock of Oaktree
Systems,  Inc. for  $4,078,000  which included the issuance of 600,000 shares of
common stock of Gateway Industries, Inc. (see Note 3).


                             See accompanying notes.

<PAGE>
                    GATEWAY INDUSTRIES, INC. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 2000
                                   (Unaudited)

1.   General

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information and with the instruction to Form 10-QSB and Item
310 of Regulation S-B.  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,  the accompanying unaudited
interim financial statements contain all adjustments  (consisting only of normal
recurring accruals) necessary to make such financial  statements not misleading.
Results  for the  three  and nine  months  ended  September  30,  2000,  are not
necessarily  indicative of the results that may be expected either for any other
quarter in the year  ending  December  31,  2000,  or for the entire year ending
December 31, 2000. For further information,  refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1999.

2.       Operations

         Gateway  Industries,  Inc. (the "Company") was incorporated in Delaware
in July 1994. The Company had no operating  business from December 1996 to March
2000, when it acquired all of the outstanding  common stock of Oaktree  Systems,
Inc.  ("Oaktree").  Oaktree  provides  database  development  consolidation  and
management  services,  and web site design and  maintenance  to customers.  Such
customers are  principally  not-for-profit  entities,  health care providers and
publishers throughout the United States.

         The Company had no full time  employees  from  December  1996 until the
acquisition of Oaktree in March 2000. The Company's  officers and Steel Partners
Services,  Ltd. (an entity controlled by the Company's  Chairman) devote time to
the Company's  administration and in exploring potential  acquisitions and other
business opportunities.

3.   Purchase of Subsidiary

     In March 2000 the Company acquired 100% of the outstanding stock of Oaktree
for a purchase  price of  $4,078,000,  consisting  of  $2,000,000  in cash,  the
issuance of 600,000  shares of common  stock of the  Company,  the  repayment of
existing Oaktree bank debt of $640,000 and expenses of $70,000.  The acquisition
was  accounted  for as a  purchase,  and,  accordingly  include  the  results of
operations since the date of acquisition.  The excess of purchase price over the
fair value of net assets  acquired  was recorded as goodwill of  $3,124,000  and
other intangible assets of $350,000 which will be amortized over 15 and 5 years,
respectively.

     The  following  consolidated  condensed  unaudited  proforma  statement  of
operations, as if the Oaktree acquisition had occurred at January 1, 1999.
<TABLE>
<CAPTION>
                                      Three months ended                            Nine months ended
                                         September 30,                                September 30,
                                     2000            1999                         2000            1999
                                     --------------------                         --------------------
<S>                             <C>              <C>                         <C>              <C>
     Sales                      $   936,000      $   728,000                 $ 2,557,000       $2,055,000
     Cost of expenses             1,068,000          895,000                   3,280,000        2,472,000
     Other income                    42,000           59,000                     171,000          197,000
                                -----------      -----------                 -----------      -----------
       Net loss                 $   (90,000)     $  (108,000)                $  (552,000)     $  (220,000)
                                ===========      ===========                 ===========      ===========

     Net loss per share
     --basic and diluted        $      (.02)     $      (.03)                $      (.13)     $      (.05)
</TABLE>

Assets  acquired and  liabilities  acquired at estimated fair value at March 21,
2000 are as follows:
<TABLE>
<S>                                     <C>
Cash                                    $       8,000
Accounts receivable                           376,000
Other current assets                           99,000
Fixed assets, net                             320,000
Security deposits                              13,000
Accounts payable and accrued expense         (191,000)
Capital leases                                (22,000)
                                           ----------

Total tangible net assets                 $   603,000
                                          ===========
</TABLE>

4.   Significant Accounting Policies

     Revenue Recognition:

     Revenues are  recognized  upon delivery of services.  Billings on contracts
which  extend  beyond  one month are  deferred  and then  recognized  as earned.
Customer  deposits  are used to pay for  printing  and  materials  for  customer
mailings.  The  Company  receives  these  deposits  and then makes  payments  as
directed by the customer for printing and materials as a service only.

5.   Lease Commitments

     The Company  entered into a three-year  operating lease for office space in
New York, NY which began April 1, 1998.  The Company has sublet a portion of its
office space to affiliated companies.

     Oaktree  leases 9,008 square feet of office space in  Calverton,  New York.
The lease expires on February 1, 2003. The space is rented from a partnership in
which two of the  senior  managers  of  Oaktree  each own a  material  interest.
Oaktree has a lease for 1,650 square feet in St. Paul,  Minnesota  which expires
on Dec 31, 2000.

     Future minimum lease payments under these leases are as follows:
<TABLE>
<CAPTION>
                                                Deduct            Net
                                               Sublease         Rental
                              Commitments       Rentals       Commitments

             <S>               <C>             <C>             <C>
             2000                57,000          17,000          40,000
             2001               126,000          16,000         110,000
             2002               105,000              --         105,000
                                -------        --------        --------

                               $288,000        $ 33,000        $255,000
                               ========        ========        ========
</TABLE>

6.   Net Loss Per Share

     Net loss per share was  calculated  using the  weighted  average  number of
common shares  outstanding.  The effect of all common stock  equivalents  is not
included  in the per  share  computation  for the three  and nine  months  ended
September 30, 2000 and 1999, as such items are  anti-dilutive in these quarters.
Accordingly,  basic and diluted  income per share are the same for the three and
nine months ended September 30, 2000 and 1999.
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

     The Company  acquired  Oaktree on March 21, 2000,  for a purchase  price of
approximately  $4.1 million,  consisting of $2 million in cash,  the issuance of
600,000  restricted  shares of common stock of the Company and the assumption of
approximately  $640,000  of debt  (which  was  repaid in full at  closing),  and
certain fees and expenses.

     Oaktree  had  revenues  of  approximately  $3.0  million  in  1999  and was
marginally profitable. Oaktree's 1999 operating income was adversely impacted by
expenses related to Year 2000 preparedness,  unusually large software and system
upgrades  and web design  development  projects  which are not expected to recur
annually  to the  extent  incurred  in 1999.  The  Company  believes  that these
expenditures will enable Oaktree to significantly  enhance the services provided
to its customers.

     The  Company  intends to  continue  to enhance  Oaktree's  internal  growth
opportunities and efforts,  and explore acquisitions of established products and
service  providers that will provide  opportunities  to present  customers to an
integrated, full-service product offering.

     The Company's ability to make further product  acquisitions will depend on,
among other things, the availability of appropriate  acquisition  opportunities,
the  ability  to obtain  appropriate  financing  and the  Company's  ability  to
consummate  acquisitions on acceptable terms. There can be no assurance that the
Company will be able to consummate any such acquisition on acceptable terms.

     Oaktree  competes in a highly  fragmented  industry  with many national and
local  competitors.  Competition  comes  from many  sources  including  database
development companies,  service bureaus, and mailhouses. Many of the competitors
of Oaktree possess  substantially  greater financial,  technical,  marketing and
other resources than Oaktree.

     As of  September  30,  2000,  Oaktree  employed  64 full time and part time
employees.  None of the  employees  are  subject  to any  collective  bargaining
agreements and the Company believes that the relationship  with its employees is
good.

REVENUES AND EXPENSES

     The Company had no operating  business from 1996 until the  acquisition  of
Oaktree in March 2000.

     During the three  month  period  ended  September  30,  2000,  Oaktree  had
revenues of $936,000,  cost of sales of $133,000 and a gross profit of $803,000.
Gateway's  consolidated  costs and  expenses  for the three month  period  ended
September  30,  2000  aggregated  $935,000,  consisting  of payroll  expenses of
$498,000,  professional fees of $35,000,  general and administrative  expense of
$225,000, rental cost of $33,000, and depreciation and amortization of $144,000.

     During the period from March 22, 2000 to September  30,  2000,  Oaktree had
revenues  of  $1,899,000  and cost of sales of  $320,000  and a gross  profit of
$1,579,000.  Gateway's consolidated costs and expenses for the nine month period
ended  September  30, 2000 totaled  $2,114,000,  including  payroll  expenses of
$1,032,000,  professional fees of $154,000,  general and administrative expenses
of $643,000,  rental costs of $61,000,  and  depreciation  and  amortization  of
$224,000.

     The proforma income statement in Note 3 shows that the net loss incurred by
the Company for the three and nine months ended September 30, 2000 calculated as
if Oaktree had been  acquired on January 1, 1999,  decreased for the three month
period and increased for the nine month period over the net loss incurred during
the same periods in 1999.  Sales are higher in both periods in 2000 versus 1999.
Higher expenses in 2000 are attributable to increased  payroll and related costs
at Oaktree  that  were  incurred as a result of  increased  sales in 2000 and in
preparation for higher sales expected to be realized starting in early 2001.
<PAGE>
OTHER INCOME

     During the third  quarter of 2000,  the Company  recognized  $42,000 of net
interest income compared with $58,000 in the comparable  period of 1999. For the
nine months ended September 30, 2000,  other income totaled  $169,000  including
interest  income of $150,000  and other  income of $19,000.  For the nine months
ended September 30, 1999,  other income consisted of interest income of $169,000
and other income of $15,000.  The  difference  results  primarily from less cash
equivalents  on hand  during  2000  earning  interest  income  since the Company
invested cash in the operating business of Oaktree in March 2000.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's cash and cash equivalents totaled $3,064,000 at September 30,
2000 and $5,465,000 at December 31, 1999. $2,643,000 cash was expended March 21,
2000 for the  acquisition  of Oaktree.  At  September  30, 2000,  the  Company's
working capital balance was $2,767,000. There were no long term liabilities.

     While the  Company  seeks an  acquisition  or other  business  combination,
management  believes its cash  position is  sufficient  to cover  administrative
expenses and current obligations for the foreseeable future.
<PAGE>
                           PART II. OTHER INFORMATION

ITEM 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  (27) Financial Data Schedule (filed as part of the electronic
                       filing only)

         (b)      Reports on Form 8-K

                  The Registrant filed the following  current report on
                  Form 8-K during the period covered by this report:

                  (i)  Report  on  Form  8-K as  amended  dated  May  22,  2000,
                       reporting the acquisition of Oaktree.

<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.


                                    GATEWAY INDUSTRIES, INC.





                                    /s/ Jack Howard
                                    Jack Howard, Acting President






Date:  November 13, 2000