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


                                   FORM 10-Q
                                   ---------

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

For the quarterly period ended August 31, 2004
Commission File Number:      0-15588


                      CANTERBURY CONSULTING GROUP, INC.
        ----------------------------------------------------------
         (Exact name of registrant as specified in its charter)


Pennsylvania                                                          23-2170505
-----------------------------                                  -----------------
(State of Incorporation)                                        (I.R.S. Employer
                                                                  Identification
                                                                            No.)


                                352 Stokes Road
                                    Suite 200
                             Medford, New Jersey 08055
                       (Address of principal executive office)

                        Telephone Number:  (609) 953-0044

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act 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   X       NO
               ---          ----

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES          NO  X
                                        ---       ----

The number of shares outstanding of the Registrant's common stock as of the date
of the filing of this report 1,965,822 shares.



FORM 10-Q

PART 1 - FINANCIAL INFORMATION
---------------------------------
ITEM 1.  FINANCIAL STATEMENTS
==============================

                     CANTERBURY CONSULTING GROUP, INC.

                        CONSOLIDATED BALANCE SHEET
                     ----------------------------------

ASSETS
------

                                 August 31, 2004           November 30,
                                     (Unaudited)                2003
                                -----------------          --------------


Current Assets:


 Cash and cash equivalents             $1,015,756            $1,385,824
 Marketable securities                    100,000               300,000
 Accounts receivable, net of
   allowance for doubtful
   accounts of $219,000 and
   $271,000                             4,813,282             2,477,060
 Notes receivable - current
   portion                                304,741               287,845
 Prepaid expenses and other
   assets                                  25,531                93,311
 Inventory, principally finished
   goods, at cost                         307,137                92,599
                                      -----------           -----------
       Total Current Assets             6,566,447             4,636,639



Property and equipment at cost,
   net of accumulated depreciation
   of $1,187,000 and $1,093,000           354,885               604,449
Goodwill                                2,083,381             2,433,381
Deferred tax assets                       750,532               759,000
Notes receivable                        3,241,538             3,472,253
Other assets                               52,780                32,821
                                      -----------           -----------
       Total Assets                   $13,049,563           $11,938,543
                                      ===========           ===========


                               See Accompanying Notes



FORM 10-Q

                        CANTERBURY CONSULTING GROUP, INC.

                           CONSOLIDATED BALANCE SHEET

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------


                                   August 31, 2004          November 30,
                                       (Unaudited)              2003
                                  -----------------        --------------

Current Liabilities:

  Accounts payable - trade            $ 2,355,498           $   963,588
  Accrued expenses                        584,761               532,597
  Unearned revenue                        332,681               470,107
  Current portion, long-term debt         832,774               889,490
                                      -----------           -----------

      Total Current Liabilities         4,105,714             2,855,782

Long-term debt                          1,360,997                62,934

Subordinated convertible debt             355,000               355,000
                                      -----------           -----------
      Total Liabilities                 5,821,711             3,273,716
                                      -----------           -----------



Commitments and Contingencies


Stockholders' Equity:

  Common stock, $.001 par value,
   50,000,000 shares authorized;
   1,965,822 and 2,097,251 issued
   and outstanding                          1,966                 2,097
  Additional paid-in capital           22,751,621            24,248,039
  Accumulated deficit                 (13,375,543)          (11,989,817)
  Notes receivable for common stock-
    related parties                    (2,150,192)           (3,595,492)
                                      -----------           -----------
      Total Stockholders' Equity        7,227,852             8,664,827
                                      -----------           -----------

      Total Liabilities and

       Stockholders' Equity           $13,049,563           $11,938,543
                                      ===========           ===========

                                   See Accompanying Notes

FORM 10-Q
                                CANTERBURY CONSULTING GROUP, INC.
                             CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<S>                               <C>               <C>              <C>             <C>

                                     Three-Months Ended August 31,      Nine-Months Ended August 31,
                                        2004               2003              2004           2003
                                       -----               ----             -----           ----
                                     (Unaudited)        (Unaudited)      (Unaudited)     (Unaudited)

Service revenue                      $ 1,687,508       $ 2,511,377      $ 4,773,849     $ 8,319,397
Product revenue                        7,449,404         5,628,275       10,386,774       9,429,739
                                     -----------       -----------      -----------     -----------

   Total net revenue                   9,136,912         8,139,652       15,160,623      17,749,136

Service costs and expenses             1,141,583         1,830,168        3,372,608       6,162,112
Product costs and expenses             6,949,037         5,161,795        9,553,248       8,569,639
                                     -----------       -----------      -----------      ----------

   Total costs and expenses            8,090,620         6,991,963       12,925,856      14,731,751

Gross profit                           1,046,292         1,147,689        2,234,767       3,017,385

Selling                                  330,312           438,648        1,055,615       1,243,166
General and administrative               769,052         1,072,011        2,343,014       3,444,644
Goodwill Impairment                      350,000              -             350,000           -

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

   Total operating expenses            1,449,364         1,510,659        3,748,629       4,687,810


Other income/(expense)
 Interest income                          81,502           116,258          215,168         387,569
 Interest expense                        (34,032)          (29,408)         (74,050)        (90,358)
 Other                                    11,863               989           34,916           2,935
                                     -----------       ------------     -----------      ----------

   Total other income/(expense)           59,333            87,839          176,034         300,146


Loss from continuing
 operations before income taxes         (343,739)        (275,131)       (1,337,828)     (1,370,279)

Income tax (benefit)/provision              -             (71,000)             -           (261,000)
                                     -----------       -----------      -----------      -----------

Loss from continuing
 operations                             (343,739)        (204,131)       (1,337,828)     (1,109,279)
(Loss)/income from discontinuing
 operations  (net of income
 taxes of $0, $2,000, $0 and
 $(11,000))                                 -               8,626           (47,898)        (47,790)
                                     -----------       ----------       -----------     -----------
Net loss                           $    (343,739)      $ (195,505)      $(1,385,726)    $(1,157,069)
                                   =============       ==========       ===========     ===========

Net loss per share
  and common share equivalents

  Basic and diluted:
   Loss from
     continuing operations                 $(.17)           $(.11)            $(.65)          $(.61)
   Loss from discontinuing
     operations                              -                -                (.02)           (.03)
                                     -----------       -----------      -----------     -----------

   Net loss                                $(.17)           $(.11)            $(.67)          $(.64)
                                   =============       ===========      ===========      ==========

  Weighted average number
   of common shares - basic
   and diluted                         2,011,200         1,852,700        2,066,800       1,814,100
                                   =============       ===========     ============      ==========
</TABLE>
                               See Accompanying Notes



FORM 10-Q
                       CANTERBURY CONSULTING GROUP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE NINE MONTHS ENDED AUGUST 31, 2004 AND AUGUST 31, 2003

                                      August 31, 2004     August 31, 2003
                                    -------------------  -----------------
                                        (Unaudited)         (Unaudited)
Operating activities:
 Net loss                               $(1,385,726)         $(1,157,069)
 Adjustments to reconcile
  net loss to net cash
  used in operating activities:
  Depreciation and amortization             217,901             279,481
  Provision for losses on accounts
   receivable                                14,500             (20,975)
  Deferred income taxes                       8,468            (253,535)
  401(k) contributions issued in stock         -                211,029
  Loss on sale of subsidiary                  9,194                -
  Issuance of stock options to
   consultants for services                    -                 12,740
  Issuance of common stock to officers
   in lieu of salary                           -                 77,504
  Goodwill impairment                       350,000                -

  Changes in operating assets,
   Accounts receivable                   (2,350,722)            297,663
   Inventory                               (214,538)           (216,743)
   Prepaid expenses and other assets         67,780              20,953
   Other assets - non-current               (19,959)              2,415
   Accounts payable                       1,391,910             667,822
   Accrued expenses                          52,164            (255,369)
   Unearned revenue                        (137,426)           (183,520)
                                         ----------           ---------
 Net cash used in operating activities   (1,996,454)           (517,604)
                                         ----------           ---------

Investing activities:
Proceeds from redemption of
  marketable securities                     200,000                -
 Capital expenditures, net                  (28,216)            (26,862)
 Proceeds from payments on
   notes receivable                         213,255             857,754
                                         ----------           ---------
 Net cash provided by investing
   activities                               385,039             830,892
                                         ----------            --------

Financing activities:
Proceeds from payments on
  notes receivable for capital
  stock - related parties                      -                 45,315
 Principal payments on long
  term debt                                 (58,653)           (365,467)
 Proceeds from subordinated
  convertible debt                           -                  355,000
 Proceeds from line of credit             1,300,000                -
                                          ----------           ---------
 Net cash provided by
  financing activities                    1,241,347              34,848

Net (decrease)/increase in cash            (370,068)            348,136
Cash, beginning of period                 1,385,824             395,477
                                         ----------           ---------
Cash, end of period                      $1,015,756          $  743,613
                                         ==========          ==========


Non Cash Transaction:
     During the second quarter of Fiscal 2004, the Company sold
ATM/Canterbury to its previous owner.  The Company received and retired
25,000 shares of its common stock in exchange for 100% of the common
stock of ATM/Canterbury.

     During the third quarter of Fiscal 2004 the Company entered into a
$38,824 capital lease obligation in exchange for new equipment.

     During the third quarter of Fiscal 2004, 106,429 shares of Company stock
was returned in full cancellation of non-recourse notes totaling $1,445,000.
These shares were retired upon receipt by the Company.

                              See Accompanying Notes


10-Q

CANTERBURY CONSULTING GROUP, INC.

Notes to Consolidated Financial Statements  (Unaudited)
------------------------------------------------------


1.  Operations and Summary of Significant Accounting Policies

=============================================================

Basis of Presentation
---------------------

     The accompanying unaudited consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission.  Certain information and note disclosures normally included in
annual financial statements prepared in accordance with accounting principles
generally accepted in the United States have been condensed or omitted
pursuant to those rules and regulations.  It is suggested that these
unaudited consolidated financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's 10-K for
the year ended November 30, 2003.  In the opinion of management, all
adjustments (which consist only of normal recurring accruals) necessary to
present fairly the financial position, results of operations and cash flows
of all periods presented have been made.  Quarterly results are not
necessarily indicative of results for the full year.

Description of Business
-----------------------

     Canterbury Consulting Group, Inc. provides broad based information
technology, management consulting services and training to both corporate
and government clients.  Canterbury's mandate is to become an integral part
of its clients' management and technical infrastructure, designing and
applying the best products and services to help them achieve a competitive
advantage.

     For information about the Company's revenues, profit or loss, and
assets by segment, see Note 2 of the Notes to Consolidated Financial
Statements.


Principles of Consolidation
----------------------------

     The consolidated financial statements include the accounts of the
Company and all of its subsidiaries.  All material intercompany transactions
have been eliminated.

Use of Estimates

----------------
     Our consolidated financial statements have been prepared in accordance
with generally accepted accounting principles in the United States (US GAAP).
The preparation of these financial statements requires us to make estimates
and judgments that affect the reported amounts in the financial statements and
accompanying notes. These estimates form the basis for judgments we make about
the carrying values of assets and liabilities that are not readily apparent
from other sources. We base our estimates and judgments on historical
experience and on various other assumptions that we believe are reasonable
under the circumstances. However, future events are subject to change and the
best estimates and judgments routinely require adjustment. US GAAP requires us
to make estimates and judgments in several areas, including those related to
impairment of goodwill and equity investments, revenue recognition,
recoverability of inventory and receivables, the useful lives of long lived
assets such as property and equipment, the future realization of deferred
income tax benefits and the recording of various accruals. The ultimate
outcome and actual results could differ from the estimates and assumptions
used.

Revenue Recognition
-------------------
Product Revenue

     Product revenue is recognized when there is persuasive evidence of an
arrangement, the product has been delivered, the sales price is fixed or
determinable, and collectibility is reasonably assured. The product is
considered delivered to the customer once it has been shipped, and title and
risk of loss have transferred. The Company defers revenue if there is
uncertainty about customer acceptance.  Product revenue represents sales of
computer hardware and software.  Generally, the Company is involved in
determining the nature, type, and specifications of the products ordered by the
customer.

Service Revenue

     Service revenue is recognized when there is persuasive evidence of an
arrangement, the sales price is fixed or determinable, and collectibility is
reasonably assured.  Service revenues represent training and consulting services
provided to customers under separate consulting and service contracts.  Revenues
from these contracts are recognized as services are rendered.

Statement of Cash Flows
-----------------------

     For purposes of the Statement of Cash Flows, cash refers solely to demand
deposits with banks and cash on hand.

Marketable Securities
----------------------


     At August 31, 2004 and November 30, 2003, the Company held marketable
securities comprised of $100,000 and $300,000 investment, respectively, in a
long-term tax-exempt bond fund.  The Company's marketable securities are
classified as available-for-sale and are carried at fair market value.  There
were no unrealized gains or losses on marketable securities for the period ended
August 31, 2004.

Accounts Receivable
-------------------

     The carrying value of accounts receivable is based upon customer invoiced
amounts due to us, adjusted for allowances for doubtful accounts.  We evaluate
the collectibility of our accounts receivable based on a combination of factors.
In cases where we are aware of circumstances that may impair a specific
customer's ability to meet its financial obligations to us, we record a specific
allowance against amounts due to us, and thereby reduce the net recognized
receivable to the amount we reasonably believe will be collected. For all other
customers, we estimate allowances for doubtful accounts based on the length of
time the receivables are past due, industry and geographic concentrations, the
current business environment and our historical experience.

Notes Receivable
-----------------

     The carrying value of notes receivable is based upon their principal
amounts as of August 31, 2004 and November 30, 2003.  No allowance for
uncollectible amounts has been recorded due to the timely receipt of all
scheduled installments of principle and interest to date, and the expected
future receipt of remaining installment amounts due us.  Interest income from
notes receivable is recognized as earned over time based on the stated terms of
the notes.

Inventories
-----------

     Inventories are stated at the lower of cost or market utilizing a first-in,
first-out method of determining cost.

Depreciation and Amortization
--------------------------------

     The Company depreciates and amortizes its property and equipment for
financial statement purposes using the straight-line method over the estimated
useful lives of the property and equipment (useful lives of leases or lives of
leasehold improvements and leased property under capital leases, whichever is
shorter).  For income tax purposes, the Company uses accelerated methods of
depreciation.

     The following estimated useful lives are used:

     Building and improvements          7 years
     Equipment                     3 to 5 years
     Furniture and fixtures        5 to 7 years

Income Taxes
-------------

     Income tax expense is based on pretax financial accounting income. Deferred
tax assets and liabilities are determined based on the difference between the US
GAAP financial statements and tax basis of assets and liabilities using enacted
tax rates in effect for the year in which the differences are expected to
reverse.  Deferred tax assets are reduced by valuation allowances to amounts
that are more likely than not to be realized.  No income tax benefit was
recorded for the three or nine-month period ended August 31, 2004 as there was a
100% valuation allowance booked against the current period loss.

Reverse Stock Split
-------------------

     On January 24, 2003, the Company's Board of Directors approved a one for
seven reverse stock split of the Company's common shares.  All share and per
share information contained in these financial statements gives retroactive
effect to the 1 for 7 reverse stock split.

Concentration of Risk
----------------------

     The Company maintains cash balances at a creditworthy bank located in the
United States.  Accounts at the institution are insured by the Federal Deposit
Insurance Corporation up to $100,000.  The Company does not believe that it
has significant credit risk related to its cash balance.

     The Company holds marketable securities in the form of mutual fund shares
with a highly reputable mutual fund company located in the United States.

     As previously discussed, the Company is in the business of providing
management and information technology services and training.   These services
are provided to a large number of customers in various industries in the United
States.  The Company's trade accounts receivable are exposed to credit risk, but
the risk is limited due to the diversity of the customer base and the customers
wide geographic dispersion.  The Company performs ongoing credit evaluations of
its customers' financial condition. The Company maintains reserves for potential
bad debt losses and such bad debt losses have been within the Company's
expectations.

     As of March 2004, all Canterbury operating subsidiaries were headquartered
in the Mid Atlantic and Northeast region of the country.  As such, the majority
of revenues were generated in these two geographic regions.

     For the three and nine months ended August 31, 2004, a significant number
of local and state agencies in Maryland purchased equipment under a contract
with the City of Baltimore from USC/Canterbury (Value Added Hardware Reseller
Segment).  Total purchases under this contract represented 10% of this segment's
revenue and 8% of consolidated revenue for the three-month period ended August
31, 2004.  Total purchases under this contract represented 23% of this segment's
revenue and 16% of consolidated revenue for the nine-month period.

     During April, 2004 USC/Canterbury was awarded the contract, along with one
other vendor, to provide the City of Baltimore with Hewlett Packard hardware.
The contract is for three years with five one-year options by the City of
Baltimore.  A second group of customers, from a county in Virginia, accounted
for 65% of the revenues in the reseller segment and 44% of consolidated revenues
for the first nine months of Fiscal 2004.  This group of over 80 customers
purchased equipment from USC/Canterbury under the City of Baltimore contract as
well.  For the quarter ended August 31, 2004, this group of customers accounted
for 81% of revenues in this segment and 65% of consolidated revenues. For the
nine months ended August 31, 2004, one Usertech/Canterbury customer accounted
for 20% of service revenue and 6% of total revenue.  For the quarter ended
August 31, 2004, the same Usertech/Canterbury customer accounted for 20% of
service revenue and 4% of total revenue.

     One vendor represented 64% of the product cost in the Value Added Reseller
Segment and 48% of consolidated costs for the first nine months of Fiscal 2004.
Another major vendor represented 26% and 19% of segment and consolidated costs
and expenses, respectively for the same nine-month period.

     For the quarter ended August 31, 2003, a significant number of local and
state agencies in Maryland purchased equipment under a contract with the City of
Baltimore from USC/Canterbury (Value Added Hardware Reseller Segment).  Total
purchases under this contract represented 33% of this segment's revenue and 22%
of consolidated revenue.  A second group of customers, from a county in
Virginia, accounted for 61% of the revenues in the reseller segment and 42% of
consolidated revenues for the quarter.  This group of over 80 customers
purchased equipment from USC/Canterbury under the City of Baltimore contract as
well.

Fair Value of Financial Instruments
------------------------------------

     The fair value of financial instruments is determined by reference to
various market data and other valuation techniques as appropriate.  Management
believes that there are no material differences between the recorded book values
of its financial instruments and their estimated fair value.

Reclassifications
-----------------

     Certain reclassifications have been made to prior years' balances in order
to conform to current presentations.


2.  Segment Reporting
======================

     The Company is organized into two operating segments and the corporate
office.  The operating segments are training and consulting and value added
hardware reseller.  A third segment, software development, was discontinued as
of March 2004 and as such is reported as a discontinued operation as of February
29, 2004.  A fourth segment, technical staffing, was discontinued during the
fourth quarter of Fiscal 2003.  All historical information for the software
development and technical staffing segment has been omitted from the segment
presentation below.  Summarized financial information for the three and nine
months ended August 31, 2004 and August 31, 2003, for each segment, is as
follows:

For the nine months ended August 31,

                   Training      Value Added
                     and         Hardware
2004              Consulting     Reseller        Corporate       Total
------------   -------------    -----------      ---------   ----------
Revenues          $4,773,849   $10,386,774       $     -      $15,160,623
(Loss)/income
   before taxes     (724,859)      369,713         (982,682)   (1,337,828)
Assets             3,256,021     3,658,865        6,134,678    13,049,564
Interest income           33          -             215,135       215,168
Interest expense      49,760         1,186           23,104        74,050
Depreciation and
   amortization      192,798         4,373           20,730       217,901


                   Training      Value Added
                     and         Hardware
2003              Consulting     Reseller         Corporate       Total
------------   -------------    -----------      ------------  -----------
Revenues          $8,319,397    $9,429,739        $      -     $17,749,136

(Loss)/income
   before taxes     (942,984)      464,857           (892,152)  (1,370,279)
Assets             5,864,023     1,704,724         10,239,924   17,808,671
Interest income          214          -               387,355      387,569
Interest expense      47,697           821             41,840       90,358
Depreciation and
   amortization      239,673        14,122             17,608      271,403


For the three months ended August, 31,

                   Training      Value Added
                     and         Hardware
2004              Consulting     Reseller        Corporate       Total
------------   -------------    -----------      ---------   ----------
Revenues          $1,687,508    $7,449,404       $     -       $9,136,912
(loss)/income
   before taxes     (383,887)      362,693         (322,545)     (343,739)
Assets             3,256,021     3,658,865        6,134,678    13,049,564
Interest income            2          -              81,500        81,502
Interest expense      17,790            49           16,193        34,032
Depreciation and
   amortization       62,210         1,405            6,910        70,525


                   Training      Value Added
                     and         Hardware
2003              Consulting     Reseller         Corporate       Total
------              ----------   -----------     ------------ -------------
Revenues          $2,511,377    $5,628,275       $      -      $ 8,139,652
(Loss)/income
   before taxes     (280,384)      304,752           (299,499)    (275,131)
Assets             5,864,023     1,704,724         10,239,924   17,808,671
Interest income         -            -                116,258      116,258
Interest expense      15,277           295             13,836       29,408
Depreciation and
   amortization       69,442         4,540              5,668       79,650


3.  Notes Receivable
====================

     During September, 2003, the Company received $2,295,327 representing the
remaining principal balance plus accrued interest for a note which was received
in November 1995 as part of the consideration for the sale of a former
subsidiary.  The Company was scheduled to receive monthly payments of $33,975
inclusive of interest at 7.79% per year through November 2005 and a balloon
payment of $1,707,000 in December 2005.  In conjunction with this prepayment,
the Company issued 145,000 shares of restricted common stock to consultants for
services rendered in this transaction valued at fair market value.

     In addition, the Company held notes receivable assets from a related party
in the aggregate amount of $3,546,279 at August 31, 2004.  These notes have
interest terms that average 7.3% per year and are scheduled to mature at various
dates through November 2006, with a balloon payment of $1,948,000 in December,
2006.  The aggregate amount includes an $860,000 demand note. During April,
2003, in order to fortify the liquidity of the balance sheet, the Company
negotiated a $500,000 paydown of the demand note (from $1,360,000 to $860,000).
On April 3, 2003 the independent directors, who are a majority of the Board of
Directors of Canterbury, voted to reduce the annual interest rate on the note
from 10% to 5% per annum in exchange for the principal payment of $500,000 which
was received by the Company during April, 2003.  The demand note is included in
the non-current portion of notes receivable at August 31, 2004 and November 30,
2003.

     The company has received all scheduled monthly installments for notes
receivable outstanding as of August 31, 2004.


4.  Property and Equipment
==========================

     Property and equipment, which is recorded at cost, consists of the
following:
                                     August 31, 2004      November 30, 2003
                                    -----------------     -----------------

Machinery and equipment               $1,240,870            $1,434,874
Furniture and fixtures                   224,895               225,230
Leased property under capital
   leases and leasehold improvements      76,066                37,242
                                      ----------            ----------
                                       1,541,831             1,697,346
Less: Accumulated depreciation        (1,186,946)           (1,092,897)
                                      ----------            ----------
     Net property and equipment      $   354,885           $   604,449
                                     ===========           ===========

     Accumulated depreciation of leased property under capital leases at
August 31, 2004 amounted to $14,000.


5.  Goodwill
==========================

     The Company recorded $350,000 of goodwill impairment charges related to
MSI/Canterbury (Training and Consulting Segment) during the third quarter of
Fiscal 2004.  The continued declining revenues during the year (and especially
over the summer months) has caused a significant reduction in MSI/Canterbury
operating income over previous years.  The fair value of this subsidiary's
goodwill was estimated based on recent earnings history and our future earnings
expectations for this business as of August 31, 2004.  The Company will perform
its annual goodwill impairment tests for all reporting units as of November 30,
2004.

     The changes in carrying amount of goodwill for the nine months ended
August 31, 2004 by reportable segment are as follows:

                          Training      Value Added
                            and          Hardware
                        Consulting       Reseller            Total
                        -------------   -------------     --------------
Balance as of
  November 30, 2003     $2,074,629       $  358,752       $ 2,433,381

Impairment loss
  for 2004                (350,000)            -             (350,000)
                        ----------       ----------       -----------
Balance as of
  August 31, 2004       $1,724,629       $  358,752        $2,083,381
                        ==========       ==========       ===========


6.  Long-Term Debt
====================

                                      August 31, 2004    November 30, 2003
                                    -----------------     -----------------
Long-term obligations consist of:
   Note payable for acquisition         $800,000              $800,000
   Revolving credit line               1,300,000                  -
   Capital lease obligations              63,298                34,589
   Notes payable - equipment              30,473               117,835
                                      ----------            ----------
                                       2,193,771               952,424
Less:  Current maturities               (832,774)             (889,490)
                                      ----------            ----------
                                      $1,360,997            $   62,934
                                      ==========            ==========

     In February, 2004 the Company and Commerce Bank agreed to an amended
loan agreement.  The new agreement calls for a two-year, $1,500,000
revolving working capital line of credit collateralized by trade accounts
receivable and inventory.  The loan carries an interest rate of the prime
rate plus one half of one percent (1/2%) and the maturity date was recently
extended six months to November 1, 2005.  Total credit available under the
agreement, subject to the carrying value of accounts receivable and inventory
collateral amounted to $1,500,000 at August 31, 2004.   Total unused credit
available amounted to $200,000 at August 31, 2004.

     The Bank's debt is secured by substantially all of the assets of the
Company and requires compliance with covenants which include the maintenance of
certain financial ratios and amounts.  The Company is restricted by its bank
from paying cash dividends on its common stock.  As of August 31, 2004, the
Company was in compliance with all of the financial covenants of its revised
loan agreement.  The Company, however, is within $62,000 of violating its
cumulative pretax loss covenant as of August 31, 2004 (limit per covenant is
$1,050,000 cumulative loss from December 1, 2003).  The actual pretax loss
amount is calculated as loss from continuing operations plus any non-cash
charge (goodwill impairment, income tax reserves, etc.)

     As part of the purchase price paid for the acquisition of Usertech in
September, 2001, the Company agreed to pay $1,200,000 to the seller over
three years at an annual amount of $400,000 plus accrued interest at 7% per
annum on the outstanding balance.  On August 4, 2003, the Company initiated
mandatory binding arbitration proceedings against Ceridian Corporation, the
previous owner of Usertech/Canterbury, as required in the Stock Purchase
Agreement between the parties.  As a result of this pending arbitration and the
extent of the damages claimed, the Company has withheld the scheduled $800,000
in principal payments of the note payable to Ceridian, as well as the total
accrued interest of $112,000, through September 28, 2004, as the damages sought
far outweigh the note payable to them. The disputed $800,000 is classified as
part of the current portion of long-term debt as of August 31, 2004.

     Aggregate fiscal maturities on long-term debt, exclusive of obligations
under capital leases, are $802,000 in 2004; $1,310,000 in 2005; and $10,000 in
2006, and $8,000 in 2007.

     The carrying value of the long-term debt approximates its fair value.


7.  Capital Leases
==================

     Capital lease obligations are for certain equipment leases which expire
through fiscal year 2006.  Future required payments under capitalized leases
together with the present value, calculated at the respective leases' implicit
interest rate of approximately 16% at their inception is as follows at
August 31, 2004:

Total minimum lease payments through November 30, 2004              $ 8,709
Total minimum lease payments through November 30, 2005               34,837
Total minimum lease payments through November 30, 2006               30,728
Total minimum lease payments through November 30, 2007                9,200
                                                                    -------
Total minimum lease payments                                         83,474
Less amount representing interest                                   (20,176)
                                                                    -------
Present value of long-term obligations under capital leases         $63,298
                                                                    =======


8.  Related Party Transactions
==================================

     During Fiscal 2001, certain officers and directors of the Company purchased
a 33% stock ownership in a corporation that was previously a subsidiary of the
Company prior to the November 1996 sale by the Company of its 100% stock
ownership in this corporation to an outside group.  These officers and directors
purchased their ownership from this outside group.  The Company holds notes
receivable in the amount of $3,546,279 from this corporation of which $2,599,413
pertains to notes originating on the November 1996 date of sale.  The Company
maintained the same level of security interest protection and the same debt
amortization schedule.  During the fourth quarter of Fiscal 2003, a 22% owner of
this corporation passed away.  After his death, that corporation purchased and
retired his shares from his estate.  As a result of this purchase and retirement
of his shares, certain officers and directors of the Company now own 44% of this
corporation.

     At August 31, 2004 and November 30, 2003, the total notes receivable plus
accrued interest for issuances of Company common stock to corporate officers,
corporate counsel and certain consultants totaled $2,150,000 and $3,595,000,
respectively.  These non-recourse notes are collateralized by common stock of
the Company and are reported as a contra-equity account.  Interest rates average
4%.  During the third quarter of Fiscal 2004, 106,429 shares of Company common
stock was returned and retired in full satisfaction of $1,445,000 in notes
receivable plus accrued interest.  As part of this third quarter transaction,
all seven members of its Board of Directors (inclusive of three corporate
executives) as well as two subsidiary presidents have returned 88,571 shares of
Canterbury restricted common stock to the Company.  These shares had been posted
as collateral by all of these individuals against notes payable to the Company
totaling $1,202,800.  The notes came due on June 28, 2004, and the
aforementioned individuals had the option of returning these shares to the
Company or paying the associated notes and accrued interest in full.  All of the
individuals determined to return their shares to the Company.  There was no
impact on the Company's income statement or net worth as a result of these
common stock retirements since the carrying value of the common stock and the
notes receivable were identical.  The Company uses variable accounting under
SFAS 123 to account for Company stock issued for non-recourse notes.  This type
of transaction is similar in economic substance to the issuance of stock
options.  No amounts have been charged to earnings to date due to the decrease
in market value of Company stock during the term of the notes.

     Prior to July 17, 2002, $1,739,000 of these notes were recourse notes.  On
July 17, 2002 the Compensation Committee recommended, and the Board of Directors
approved a modification of the April 10, 2001 and the May 16, 2001 notes.  The
notes became non-recourse as to principal and interest as of September 1, 2002
with the issued shares continuing to collateralize the notes.  All accrued
interest on the notes as of September 1, 2002 has been paid to the Company.
Principal and interest must be paid by recipient before they are entitled to
sell their respective shares.  If principal and interest have not been paid by
the maturity date of the recipient notes, then recipients' sole obligation shall
be that any shares relating to this nonpayment will be forfeited and returned to
the Company.  If this event were to occur, both the underlying shares and the
notes receivable would be cancelled with no effect on the net worth of the
Company.  In consideration for this modification the term of these notes was
reduced and shortened from April and May, 2006 to December 31, 2004.  The Board
also prohibited the issuance of any additional stock options, stock or any other
form of equity to the recipients for all of Fiscal 2002.


9.  Stock Listing
=================

     On September 8, 2004 the Nasdaq Stock Market ("Nasdaq") notified Canterbury
that the Company's common stock has not maintained a minimum market value of
publicly held shares ("MVPHS") of $1,000,000 as required for continued inclusion
by Nasdaq's Marketplace Rule 4310(c)(7) (the "Rule").  Therefore, in accordance
with Marketplace Rule 4310(c)(8)(B), the Company will be provided 90 calendar
days, or until December 7, 2004, to regain compliance.  If, at anytime before
December 7, 2004, the MVPHS of the Company's common stock is $1,000,000 or more
for a minimum of 10 consecutive trading days, Nasdaq will provide written
notification that the Company complies with the Rule.  If compliance with
this Rule cannot be demonstrated by December 7, 2004, Nasdaq will provide
written notification that the Company's securities will be delisted.

     On June 23, 2004 Nasdaq had notified Canterbury that the bid
price of the Company's common stock had closed below the minimum requirement for
continued inclusion under Marketplace Rule 4310(c)(4), and that in accordance
with Marketplace Rule 4310(c)(8)(D), the Company must regain compliance by
December 20, 2004 or be delisted.


10.  Discontinued Operations
===========================

     During March 2004, the Company entered into negotiations to sell
ATM/Canterbury back to the original owner.  The transaction was finalized in
April, 2004.  Canterbury sold 100% of the stock in ATM/Canterbury in exchange
for 25,000 shares of Canterbury common stock (which have been retired), that the
owner had retained from the original transaction in 1997.  The transaction was
effective as of March 3, 2004.  As a result of the transaction the Company
recorded a $9,194 loss on the sale of discontinued operation in the second
quarter of Fiscal 2004.

     The Company's decision to sell ATM/Canterbury was based on the lack of
demand for ATM/Canterbury's products and services by existing customers; the
inability to increase sales to new customers and the Company's desire to focus
on its training and consulting segment and its value added reseller segment.

     Historical financial data for ATM/Canterbury for the three months ended
August 31, 2004 and August 31, 2003:


                                 August 31, 2004              August 31, 2003
                                -----------------           -----------------
        Revenues                      $  -                       $102,574
        Pretax loss                      -                        (23,342)

     Historical financial data for ATM/Canterbury for the nine months ended
August 31, 2004 and August 31, 2003:

                                 August 31, 2004              August 31, 2003
                                -----------------           -----------------
        Revenues                      $58,866                    $307,260
        Pretax loss                   (38,704)                    (72,603)

     During the fourth quarter of Fiscal 2003, the Company discontinued the
operation of its technical staffing segment (DMI/Canterbury).  The significant
decline in demand for contract, full and part-time technical employees due to
the economic downturn in the technology sector over the past several years was
the major cause for this action.  There was no gain or loss realized on the
abandonment of this business segment.

     Historical financial data for DMI/Canterbury for the three months
ended August 31, 2004 and August 31, 2003:


                                 August 31, 2004              August 31, 2003
                                -----------------           -----------------
        Revenues                      $  -                       $ 83,463
        Pretax income                    -                         33,966

     Historical financial data for DMI/Canterbury for the nine months
ended August 31, 2004 and August 31, 2003:


                                 August 31, 2004              August 31, 2003
                                -----------------           -----------------
        Revenues                      $  -                       $368,786
        Pretax income                    -                         13,813

    Assets and liabilities for DMI/Canterbury as of November 30, 2003 included
in the consolidated balance sheet:

        Net receivable                          $7,290
        Other assets                               162
        Accounts payable and accrued expenses    1,710



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


Cautionary Statement
--------------------

     When used in this Report on Form 10-Q and in other public statements, both
oral and written, by the Company and Company officers, the word "estimates,"
"project," "intend," "believe," "anticipate," and similar expressions, are
intended to identify forward-looking statements regarding events and financial
trends that may affect the Company's future operating results and financial
position.  Such statements are subject to risks and uncertainties that could
cause the Company's actual results and financial position to differ
materially.  Such factors include, among others: (1) the Company's success in
attracting new business; (2) the competition in the industry in which the
Company competes; (3) the sensitivity of the Company's business to general
economic conditions; and (4) other economic, competitive, governmental and
technological factors affecting the Company's operations, markets, products,
services and prices.  The Company undertakes no obligations to publicly
release the result of any revision of these forward-looking statements to
reflect events or circumstances after the date they are made or to reflect the
occurrence of unanticipated events.

Risk Factors That Relate To Our Business
----------------------------------------

     Uncertain economic conditions continue to affect many of our customers'
businesses and many clients continue to delay and reduce their purchases of
training services, hardware and consulting.  The Company's recovery
from the past several years of economic downturn continues to lag behind the
current economic recovery.

Delay Or Inability To Return To Positive Operating Cash Flow
     While the Company has taken significant steps to reduce fixed costs and
increase revenue, a significant delay in returning to positive operating cash
flow could adversely effect our liquidity and ability to conduct business.
The Company reduced payroll expense and facility leases significantly during
Fiscal 2003.  Four facilities were closed and two more were greatly downsized,
as management introduced a more flexible cost model into the business.  Annual
rent and occupancy expense were reduced by over $1,000,000 from the beginning
of Fiscal 2003 to the beginning of Fiscal 2004.  Over sixty employees were
eliminated in several workforce reductions during 2003.  Even with these
cost reductions, revenues must increase in Fiscal 2005 over Fiscal 2004 in
order to achieve positive operating profit and cash flows.  The newly formed
sales subsidiary, Canterbury Corporate University must increase sales pipeline
activity in the near term to positively impact reported revenues for the
training and consulting segment.  If this does not occur it could negatively
effect our operating cash flow.

Downturn In Economy
     If the economy does not continue to recover and if our clients continue to
decrease, delay or eliminate spending for technology and training, our ability
to continue operating at our current reduced level of revenues will be greatly
tested.  The Company cannot generate profits or positive cash flow at recent
revenue levels.  Many clients have considered certain training to be
discretionary in these uncertain economic times.  Technology expenditures are
being delayed by many of them in an attempt to balance their own budget
objectives.  These factors can cause significant financial disruption to small
vendors such as Canterbury and could have a material adverse effect on our
consolidated operating results.

Competition
     If our current customers choose to purchase goods and/or services from new
or existing competitors, it could have a material adverse effect on our
operating results.

     The various operating segments of the Company have relatively low
barriers to entry.  New and existing organizations are constantly attempting
to penetrate our customer base.  Larger, more financially seasoned competitors
have the ability to overwhelm our markets and customers though more aggressive
sales tactics.  Internal training departments within our current and potential
client base are also a primary competitor.  There is also increasing
competition from computer hardware and software vendors as they attempt to
capture more of the technology services market.  Finally, low cost providers
in the training and consulting market are attempting to buy business through
their low price business model.

Dependency on Key Personnel
     If we are unable to recruit and retain qualified personnel, it could
have a material adverse effect on our operating results. Our success depends
on the continued employment of our senior executives and managers and other
key personnel.  The loss of these people, especially without advance notice,
could have a material adverse effect on our operations.  An ongoing sales and
delivery staff are vital to ongoing customer relations and satisfaction.  A
significant portion of our consolidated revenue is service oriented (31% for
the first nine months of Fiscal 2004).  As such the loss of key personnel could
have a negative impact on our ability to deliver and service our clients.
As the economy improves, it will become more difficult to retain existing
employees and attract new recruits since they will have more employment options
available to them.

Municipal Budget Constraints
     USC/Canterbury, our value added hardware reseller, does a significant
amount of business with the states of Maryland and Virginia (88% of this
segments total revenue for the nine months ended August 31, 2004).  Lower tax
revenues in these states have reduced the amount of funding for technology
purchases recently and this trend could continue.  If this trend
continues, it could have a material adverse effect on this segment's
operating results.  This segment has been the most profitable segment for
the Company since Fiscal 2000, and its ongoing contribution to revenues and
profits is vital to the Company's future.

Shifts in Technology and Training Platforms
     In the training and consulting segment, much of our success depends upon
the introduction and adoption of new technology.  Our customers tend to
increase their demand for training at times when new technology or software is
being introduced.  When there are delays in the introduction of these new
products demand for training may decrease, and it could have a material
adverse effect on our operating results.  Also as our customers move toward
new distance learning platforms to replace instructor-led training, our
ability to retain our customers by providing these new electronic training
services introduces a potential risk in client retention, which could have a
material adverse effect on our operating results.

Ongoing Collection of Notes Receivable With A Related Party
     A significant portion of the Company's assets and tangible net worth is
represented by notes receivable with a related party.  To date there have been
no collection issues with these notes.  However, if the related party
experiences a significant downturn in operating cash flow or becomes insolvent
the collectibility of the notes would be in jeopardy and could have a material
adverse effect on the Company's asset base, cash flow and tangible net worth.

Acts of Terrorism
     The majority of revenues recorded by the Company is generated in both the
New York City and Washington D.C. areas.  Both of these locations were targets
of the terrorist attacks in 2001.  If there is a repeat of those events in
either one of these markets, our clients there could be distracted from their
normal course of business and as such would most likely delay or cancel
projects with the Company.  This could have a material adverse effect on our
operating results.

Other Factors
     Other factors that may affect our operating results include:
     *     reduced reliance on reseller channel by hardware manufacturers
     *     inability to secure sufficient contractor resources to meet short-
           term customer demand
     *     insufficient training facilities to meet client demand for
           instructor-led technology training
     *     loss of key clients through merger, sale or divestiture
     *     ongoing cost of compliance with provisions of the Sarbanes-Oxley
           legislation and other such compliance required by Nasdaq, the
           Securities and Exchange Commission or other regulatory bodies
     *     loss of working capital financing


Overview
--------

     The Company is engaged in the business of providing information
technology products, services and training to both commercial and government
clients.  Canterbury's focus is to become an integral part of our
clients' IT solution, designing and applying the best products, services and
training to help them achieve competitive advantage by helping their employees
to succeed.

     The two primary business units for the Company are training and
consulting and value added hardware reseller.  In the training and consulting
segment we provide a variety of technical and management training.

     Our training encompasses a wide spectrum of hardware and software
products as well as many necessary business skill topics.  These training
products are delivered in a variety of ways:  at our classroom facilities in
New Jersey and New York; at our clients' locations; electronically via the
Internet; or on the end user's computer.  Many of these training products are
custom developed for our clients.  Many contain a blended training solution
combining both instructor-led training in the classroom with distance learning
products to complete the educational process.

     The Company also provides various technical consulting services to our
clients including programming, systems integration, network security and
network management.

     The value added reseller segment provides hardware and software solutions
to the Mid-Atlantic market.  Its primary focus is state and local
government clients that have an ongoing need for technology products and
services.


Liquidity and Capital Resources
--------------------------------

     Working capital at August 31, 2004 was $2,460,000, an increase of
$679,000 since November 30, 2003.  The increase is due to the significant
increase in accounts receivable of $2,336,000, offset by the smaller increase in
accounts payable of $1,392,000.  The annual Prince William County purchase of
desktops and printers during the third quarter was the reason for the increase
in both these accounts.  The Company utilized its revolving line of credit to
fund this large transaction (over $5,000,000) and as of August 31, 2004 there
was $1,300,000 still outstanding on the line, which is classified as long term
debt on the balance sheet.

     In February, 2004 the Company and Commerce Bank agreed to an amended
loan agreement.  The new agreement calls for a two-year, $1,500,000
revolving working capital line of credit collateralized by trade accounts
receivable and inventory.  The loan carries an interest rate of the prime
rate plus one half of one percent (1/2%) and the maturity date was recently
extended six months to November 1, 2005.  Total credit available under the
agreement, subject to the carrying value of accounts receivable and inventory
collateral amounted to $1,500,000 at August 31, 2004.  Total unused credit
available amounted to $200,000 at August 31, 2004.

     The Bank's debt is secured by substantially all of the assets of the
Company and requires compliance with covenants which include the maintenance of
certain financial ratios and amounts.  The Company is restricted by its bank
from paying cash dividends on its common stock.  As of August 31, 2004, the
Company was in compliance with all of the financial covenants of its revised
loan agreement.  The Company, however, is within $62,000 of violating its
cumulative pretax loss covenant as of August 31, 2004 (limit per covenant is
$1,050,000 cumulative loss from December 1, 2003).  The actual pretax loss
amount is calculated as loss from continuing operations plus any non-cash charge
(goodwill impairment, income tax reserves, etc.)

     As part of the purchase price paid for the acquisition of Usertech in
September, 2001, the Company agreed to pay $1,200,000 to the seller over three
years at an annual amount of $400,000 plus accrued interest at 7% per annum on
the outstanding balance.  On August 4, 2003, the Company initiated mandatory
binding arbitration proceedings against Ceridian Corporation, the previous owner
of Usertech/Canterbury, as required in the Stock Purchase Agreement between the
parties.  The Company's claims arise from the September 2001 purchase of User
Technology Services, Inc. from Ceridian.  Canterbury is making various claims
ranging from breach of contract/warranty to actual/legal fraud, fraudulent
concealment, constructive/equitable fraud, and negligent/misrepresentation.
Ceridian Corporation has denied the allegations set forth by the Company and has
instituted a counterclaim in the arbitration proceedings.  Ceridian is claiming
breach of a sublease agreement by Canterbury for office space ($76,000) and
acceleration of a note payable of $800,000.  Canterbury has denied the
allegations set forth in the counterclaim.  In order to pursue its claims,
Canterbury will sustain ongoing legal and filing fees and there is no assurance
that the aforementioned arbitration will result in a favorable outcome for
Canterbury.  As a result of this pending arbitration and the extent of the
damages claimed, the Company has withheld the scheduled $800,000 in principal
payments of the note payable to Ceridian, as well as the total accrued interest
of $112,000, through September 28, 2004, as the damages sought far outweigh the
note payable to them.  The disputed $800,000 is classified as part of the
current portion of long-term debt as of August 31, 2004.  As of October 4, 2004
the Company is negotiating with Ceridian Corporation to resolve the
aforementioned dispute.  The Company wired $912,000 to Ceridian to be held by
them in a separate, interest bearing account pending a successful conclusion to
these negotiations.  If these negotiations are not successful, the money will be
returned to the Company along with accrued interest, and the arbitration process
will continue.

     Cash flow used in operating activities for the quarter ended August 31,
2004 was $(1,996,000), a decrease of $1,478,000 over the same nine month period
in Fiscal 2003.  When coupled with the year-to-date net loss of $1,386,000, the
previously mentioned significant increase in accounts receivable of $2,336,000,
offset by the smaller increase in accounts payable of $1,392,000 were the most
significant factors affecting operating cash flow.  Total assets increased by
$1,111,000 from November 30, 2003 while total liabilities were increased by
$2,548,000.  The Company's current ratio at August 31, 2004 was 1.60:1.00 versus
1.62:1.00 at November 30, 2003.


     Management believes that the Company will have sufficient funds to cover
cash flow requirements for the balance of Fiscal 2004 as a result of significant
reductions in fixed operating costs, its satisfactory balance sheet, its ability
to borrow from its revolving line of credit and ongoing collection of its notes
receivable.  Management's goal is to return to a positive operating cash flow
position in the future based upon the recent, significant reduction in fixed
expenses, coupled with substantially improved sales activity.  There was no
material commitment for capital expenditures as of August 31, 2004.  Inflation
was not a significant factor in the Company's financial statements.


RESULTS OF OPERATIONS
=====================

Revenues
---------
     Consolidated revenues decreased by $2,588,000 (15%) in the first nine
months of Fiscal 2004 as compared to the same period in 2003.  This consolidated
reduction was the combined result of lower training and consulting revenues of
$3,545,000 (43%), offset by an increase in revenue from the value added reseller
segment of $957,000 (10%).  For the three months ended August 31, 2004, training
and consulting revenues were $824,000 (33%) lower than the same three-month
period in Fiscal 2003.  Product revenues for the quarter ended August 31, 2004
were $1,821,000 (32%) higher than the previous year's third quarter.  The
decline in service revenue is consistent with the reduction experienced earlier
in the year due to the staff and facility downsizing the Company undertook
during the fourth quarter of Fiscal 2003.  Revenues in this business segment
must increase in order for it to return to profitability.  We have initiated an
ongoing and increased emphasis on sales and marketing activities in order to
take advantage of business opportunities as the economy improves.

     During the fourth quarter of 2003, the Company restructured its sales
department.  A Corporate Sales Manager was hired to consolidate the three
separate sales teams in the training and consulting segment.  Canterbury
Corporate University, Inc. ("CCU"), a wholly owned subsidiary of the Company,
was formed to market and sell all of Canterbury's training products and services
in one comprehensive training unit.  The Company has always attempted to promote
cross selling of our products and services between subsidiaries.  Some of our
largest clients are purchasers of the various training products we offer.  Under
previous subsidiary management, the sharing of business leads did not occur at
an acceptable level, and many potential sales opportunities were lost before
they were ever attempted.

     The Corporate Sales Manager and the Company have initiated several key
sales strategies in order to overcome the shortcomings of the past including the
lack of attention to marketing, sales and associated activities by the former
President of Usertech.  All training and consulting sales representatives are
being compensated and measured using the same plan.  Quota attainment is now a
benchmark for continued employment.  Quotas are set up with goals for selling
all of the Company's training and consulting products, not just what was sold in
the past on a subsidiary-by-subsidiary basis.  A Customer Relationship
Management ("CRM") system is being installed to better consolidate, track and
manage the pipeline of sales activity.  Also based upon feedback from our
customers, the Company is developing new products utilizing both instructor-led
and distance-learning delivery platforms.  We have also formalized reseller
relationships with several channel partners, whereby the sales team introduces
the various products from this program to our client base and the Company
receives a negotiated share of any sales generated.

     The Company has taken various steps to increase lead generation.  The
formation of an inside sales team; contracting with an outside telemarketing
firm; increasing the amount of marketing information to our clients through e-
mail announcements; pilot program events and more informative web sites are all
contributing to new lead flow.

     During the fourth quarter of Fiscal 2003, the Company made the decision to
exit the open enrollment public computer training segment that was part of
CALC/Canterbury's offerings for the past twenty years.  The high fixed cost of
delivery was too much to sustain in relationship to the amount of revenue being
generated.  By exiting this training delivery methodology, there will be an
anticipated decline in instructor-led computer training revenues for Fiscal
2004.  Reduced capacity, reduced marketing emphasis, and alternative delivery
options will all contribute to the projected decline.  CALC/Canterbury will
continue to offer private and general admission classes at its two training
facilities (New York City and Parsippany, New Jersey) as well as room rentals.
There will be more emphasis on offering private training at the clients'
locations.  This planned exit from the robust open enrollment public training
segment was done in order to reduce the high fixed cost associated with its
delivery and introduce more variability to the cost structure of our training
business.

     In the value added hardware reseller segment, the three and nine month
increase in revenues were the direct result of a significant increase in the
annual purchase of computer hardware by Price William County in Fiscal 2004.
The County purchased approximately $2,400,000 more desktops and printers in the
first nine months of Fiscal 2004 than they did in Fiscal 2003.  Several new high
schools and elementary schools opened in September, 2004 and needed to be
completely equipped with new computer equipment.

     It is management's intent to more fully integrate the sales team from the
training and consulting segment with the value added hardware reseller segment.
Product profiles are being shared between the two groups and the Company
anticipates the efforts of these two sales organizations will become more
integrated in the future.

     The majority of product to be sold in the near future will be Hewlett
Packard/Compaq hardware.  If Hewlett Packard/Compaq moves toward an agent model
with its resellers, USC/Canterbury would be paid an agent fee which approximates
the current gross profit from each sale.  This may greatly reduce the reported
revenue in this segment.  The manufacturer would record the revenue and hold the
accounts receivable with the client.  This possible change in business flow has
not happened to date, but it is possible that the migration to the agent model
will begin in the first half of Fiscal 2005, and this could significantly affect
the recording of revenues and expenses in the future.

     The value added hardware reseller segment has always had very high client
revenue concentration.  In the first nine months of Fiscal 2004 two groups of
clients accounted for 88% of the revenue in this segment.  There is obvious
risk associated with this very high customer concentration.  See Footnote 1,
Concentration of Risk, for more details on this topic. USC/Canterbury is
currently making a concerted effort to diversify its revenue mix.  Certain sales
representatives have been given responsibility, through quotas, to penetrate the
commercial market in the Baltimore/Washington area.  New strategic relationships
have been formed with several manufacturers to increase product offerings and
reduce dependency on Hewlett Packard/Compaq.  Management believes that there is
still a significant amount of uncertainty regarding future revenues from the
value added hardware reseller segment for Fiscal 2005.



     Technology spending in general, appears to be recovering in Fiscal
2004, but the duration and extent of a recovery is not yet known.  More
clients are engaging us in conversations and proposals about new projects and
training requirements.  The sales pipeline is fuller now than it was in the last
half of Fiscal 2003, but how much of this pipeline will result in sales is still
unknown.  One of the biggest challenges that faces the Company is the timing of
customers decisions to begin project work that has already been sold.  The
delays that were experienced late in Fiscal 2003 have continued into 2004.
These delays add to the uncertainty in revenue projections for the future.
Many clients continue to delay the start of various training projects, without
giving us firm timetables.

     Software development revenues for Fiscal 2004 and 2003 have been excluded
given that this segment has been classified as a discontinued operation as of
August 31, 2004. Technical staffing revenues are no longer being reported due to
its classification as a discontinued operating segment effective as of the
fourth quarter of Fiscal 2003.


Costs and Expenses
-------------------
     Total costs and expenses decreased by $1,806,000 (12%) for the first nine
months of Fiscal 2004 as compared to the previous year, and increased by
$1,099,000 (16%) for the three months ended August 31, 2004 versus August 31,
2003.  The year-to-date decrease was due to the significant reduction in fixed
expenses in the training and consulting segment which occurred late in Fiscal
2003.  This reduction in expenses of $2,789,000 was offset by a $983,000
increase in product costs associated with the increased sales volume in the
value added reseller segment.

     Consolidated gross profit for the nine-month period ended August 31, 2004
was 15% versus 17% the prior year.  The decrease is due to the higher sales
volume and lower margin in the value added reseller segment.  The following
chart summarizes the gross margin percentages for the Company for the three and
nine-month periods of 2004 and 2003.

                   Three-Months Ended,             Nine-Months Ended
                       August 31,                       August 31,
                   2004           2003              2004           2003
                  -----------------------------------------------------
Service             32%            27%               29%            26%
Product              7%             8%                8%             9%
Consolidated        11%            14%               15%            17%


     The improvement in service revenue gross profit (on lower sales volume) is
again attributable to the significant reduction in fixed costs for the business
segment at the end of Fiscal 2003.  The biggest problem regarding gross is sales
volume.  The absolute dollar contribution must increase in order to cover
operating costs and permit us to show a profit.

     Product margins were negatively effected by several factors.  Continued
weakness in technology spending forced margins lower as many suppliers competed
for the same business.  Manufacturers continued to eliminate reseller incentives
as the products they were offering became more commoditized.  The Company is
currently partnering with several new hardware and software manufacturers who
have specialized products that command higher profit margins.  These
relationships could become more important in the future as downward pressure
continues on margins for personal computers, printers and servers.  Management
anticipates that gross margins for product sales will remain in the 10% range
for the balance of Fiscal 2004, and into next year.

     While overall costs and expenses have been reduced through reductions
in long-term lease commitments and workforce reductions, the challenge
the Company faces now is to increase revenues and attain the benefits that
reduced overhead and fixed costs would provide. The training and consulting
segment reported a 11% improvement in gross profit percentage (from 26% to 29%)
on a 43% decline in revenues for the first nine months of Fiscal 2004 as
compared to the same nine-month period in 2003.

     When, and if, revenues increase, a higher profit level would be attainable
since our fixed cost component has been drastically reduced and a larger portion
of the delivery expense would be variable in nature.  However, if sales increase
significantly in the short term, the Company risks having insufficient resources
to deliver services due to reduced manpower and facility capacity.  The Company
would need to contract for part-time consultants and acquire additional space
through short-term rentals in order to meet client demand, which is possible,
but would be more expensive to implement.

     Selling expense decreased by $188,000 (15%) in the first nine months of
Fiscal 2004 as compared to the previous year.  Personnel expense (salaries,
bonuses, commissions and payroll burden) decrease was the biggest component of
the reduction.  Selling expense also decreased by $109,000 (25%) for the three
months ended August 31, 2004 as compared to the previous year, again related to
a reduction in personnel-related expenses.

     General and administrative expense was reduced by $1,102,000 (32%) for the
first nine months of Fiscal 2004 due primarily to significant reductions in
administrative and support staff as part of the workforce reduction discussed
previously. For the three-month period ended August 31, 2004, general and
administrative expense was also reduced by $303,000 (28%) for the same reasons.

     During the third quarter of Fiscal 2004, the Company recorded a goodwill
impairment charge of $350,000 related to the carrying value of goodwill
associated with MSI/Canterbury.  Recent earning trends have been weak and
Management concluded that a charge of $350,000 would bring the carrying value
into line with recent results.  The current value of the MSI/Canterbury goodwill
is now $909,000.  We will continue to analyze the appropriate carrying value of
all goodwill associated with our subsidiaries, to determine if further
improvement charges are warranted.

     Interest income decreased by $172,000 (44%) in the first nine months of
Fiscal 2004 as compared to the same nine months in the previous year.  The
prepayment of a note receivable from the sale of a former subsidiary in
September 2003 and the $500,000 reduction in the demand note and accompanying
reduction in the interest rate with a related party in early 2003 were the
primary reasons for the decrease.  Total notes receivable decreased by
approximately $2,560,000 in the twelve-month period ending August 31, 2004.

     Interest expense was reduced by $16,000 (18%) in the nine months of
Fiscal 2004 versus Fiscal 2003.  Reduced borrowings on the revolving line of
credit and the payoff of the remaining term debt ($800,000) with the primary
lender were the major reasons for the reduction.  For the three months ended
August 31, 2004 interest expense increased by $5,000 due to a higher interest
rate on the revolving line of credit.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
===================================================================

     We are exposed to some market risk from changes in interest rates.  The
line of credit with Commerce Bank is variable and floats with the Prime lending
rate.  A significant increase in this benchmark rate will cause our interest
expense to increase on any outstanding borrowings.

     Currently, we have $100,000 invested in a municipal bond mutual fund.  We
account for this investment in accordance with SFAS No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." These investments are
treated as available-for-sale under SFAS No. 115. The carrying value of these
investments approximates fair market value.


ITEM 4.  CONTROLS AND PROCEDURES
================================

     As of the end of the period covered by this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer/Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Rule 13a-15 under
the Securities Exchange Act of 1934, as amended.  Based upon that evaluation,
the Company's Chief Executive Officer/Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective in timely
alerting them to material information relating to the Company (including its
consolidated subsidiaries) required to be included in the Company's periodic
filings with the Securities and Exchange Commission.

     The Company's management is also responsible for establishing and
maintaining adequate internal control over financial reporting.  There were no
changes in the Company's internal control over financial reporting identified
in connection with the evaluation of it that occurred during the Company's last
fiscal quarter that materially affected, or are reasonably likely to materially
affect, internal control over financial reporting.


PART II - OTHER INFORMATION
=========================================

Item 1     Legal Proceedings
             Refer to the Liquidity and Capital Resources Section of the
Management's Discussion of Financial Condition and Results of Operations for
disclosure on legal proceedings.

Item 2     Changes in Securities - None

Item 3     Defaults Upon Senior Securities - None

Item 4     Submission of Matters to a Vote of Stock Holders - None

Item 5     Other Information - None

Item 6     Exhibits
           Exhibit 31         Certification Pursuant to Section 302 of the
                              Sarbanes-Oxley Act-Kevin J. McAndrew
         Exhibit 32         Certification Pursuant to Section 906 of the
                              Sarbanes-Oxley Act. - Kevin J. McAndrew




                    CANTERBURY CONSULTING GROUP, INC.

                                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.



                                CANTERBURY CONSULTING GROUP, INC.
                                -----------------------------------
                                (Registrant)

                                By/s/ Kevin J. McAndrew
                                ----------------------------------------------
                                Kevin J. McAndrew
                                President and Chief Executive Officer



                                By: /s/ Kevin J. McAndrew
                                ----------------------------------------------
                                Kevin J. McAndrew
                                Chief Financial Officer
October 7, 2004