U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

            [X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2000

            [ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the transition period from ____ to ____

                         Commission file number 0-14962

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


              Colorado                                  84-1028977
   (State or other jurisdiction of                   (I.R.S. employer
   incorporation or organization)                  identification number)

        P.O. Box 3755, Englewood, CO                      80155
   (Address of principal executive offices              (Zip Code)

         Issuer's telephone number, including area code: (303) 699-8784

                                    No change
                     (Former name, former address and former
                   fiscal year, if changed since last report)

     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
[_].

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest  practicable date:  389,200,000 shares of Common
Stock, par value $ .0001 per share, outstanding as of November 6, 2000.

<PAGE>

                                   FORM 10-QSB

                       FINANCIAL STATEMENTS AND SCHEDULES
                                  MORLEX, INC.

                    For the Quarter ended September 30, 2000

     The following financial  statements and schedules of the registrant and its
consolidated subsidiaries are submitted herewith:


                          PART I- FINANCIAL INFORMATION
                                                                       Page of
                                                                     Form 10-QSB
                                                                     -----------
Item 1.  Financial Statements:


Balance Sheets - September 30, 2000 (unaudited) and
December 31, 1999                                                          3

Statement of Stockholders' Equity (unaudited) as at
September 30, 2000 and December 31, 1999 and 1998                          4

Statements of Operations (unaudited) for the three months
ended September 30, 2000 and 1999 and the nine months ended
September 30, 2000 and 1999                                                5

Statement of Cash Flows (unaudited) for the three months
ended September 30, 2000 and 1999 and the nine months ended
September 30, 2000 and 1999                                                6

Notes to Financial Statements                                              7

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


                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

<PAGE>

                                  MORLEX, INC.
                         (FORMERLY AMERICA ONLINE, INC.)
                                  BALANCE SHEET

<TABLE>
<CAPTION>
                                                               September 30       December 31
                                                                   2000              1999
                                                               (Unaudited)

                                     ASSETS
<S>                                                             <C>                <C>
CURRENT ASSETS
         Cash                                                   $     246          $   3,101
                                                                ---------          ---------

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
         Accrued expenses                                       $     970          $   1,480
         Shareholder advances                                       9,000                  0
                                                                ---------          ---------

         TOTAL LIABILITIES                                          9,970              1,480
                                                                ---------          ---------

STOCKHOLDERS' EQUITY
         Common stock, $.0001 par value
          1,000,000,000 shares authorized; 389,200,000
           shares issued and outstanding                           38,920             38,920
         Additional paid-in capital                               303,728            303,728
         Deficit                                                 (352,372)          (341,027)
                                                                ---------          ---------

         TOTAL STOCKHOLDERS' EQUITY                                (9,724)             1,621
                                                                ---------          ---------
         TOTAL LIABILITIES AND
           STOCKHOLDERS' EQUITY                                 $     246          $   3,101
                                                                =========          =========
</TABLE>

<PAGE>

                                  MORLEX, INC.
                         (FORMERLY AMERICA ONLINE, INC.)
                        STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                        Additional                         Total
                                                               Common Stock              Paid in                       Stockholders'
                                                          Shares          Amount          Capital        Deficit           Equity

<S>                                                    <C>             <C>             <C>             <C>              <C>
Balance, December 31, 1997                             125,680,000     $    12,568     $   291,728     $  (304,296)     $         0

Issuance of common stock                               188,520,000          18,852               0               0           18,852

Capital contributed                                              0               0           7,000               0            7,000

Net loss for the year
  ended December 31, 1998                                        0               0               0         (22,664)         (22,664)
                                                       -----------     -----------     -----------     -----------      -----------

Balance, December 31, 1998                             314,200,000          31,420         298,728        (326,960)           3,188

Capital contributed                                              0               0           5,000               0            5,000

Issuance of common stock                                75,000,000           7,500               0               0            7,500

Net loss for the year ended
   December 31, 1999                                             0               0               0         (14,067)         (14,067)
                                                       -----------     -----------     -----------     -----------      -----------

Balance, December 31, 1999                             389,200,000          38,920         303,228        (341,027)           1,621

Net loss for the nine months
   ended September 30, 2000 (unaudited)                          0               0               0         (11,345)         (11,345)
                                                       -----------     -----------     -----------     -----------      -----------

Balance, September 30, 2000 (unaudited)                389,200,000     $    38,920     $   303,728     $  (352,372)     $    (9,724)
                                                       ===========     ===========     ===========     ===========      ===========
</TABLE>

<PAGE>

                                  MORLEX, INC.
                         (FORMERLY AMERICA ONLINE, INC.)
                             STATEMENT OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   For The Three                            For The Nine
                                                                   Months Ended                             Months Ended
                                                                   September 30,                            September 30,
                                                            2000                 1999                 2000                 1999
<S>                                                    <C>                  <C>                  <C>                  <C>
REVENUE                                                         NONE                 NONE                 NONE                 NONE
                                                       -------------        -------------        -------------        -------------
EXPENSES
         Professional                                  $       4,950        $         232        $       9,186        $       4,300
         Consulting                                                0                    0                    0                    0
         General and administrative                                0                  375                   64                  470
         Filing and transfer fees                                625                4,052                2,095                5,820
                                                       -------------        -------------        -------------        -------------

         TOTAL                                                 5,575                4,659               11,345               10,590
                                                       -------------        -------------        -------------        -------------

NET LOSS                                               $      (5,575)       $      (4,659)       $     (11,345)       $     (10,590)
                                                       =============        =============        =============        =============

LOSS PER SHARE:
   Net loss per share                                            NIL                  NIL                  NIL                  NIL
                                                       -------------        -------------        -------------        -------------

Weighted average number
of common shares outstanding                             389,200,000          314,200,000          389,200,000          314,200,000
                                                       =============        =============        =============        =============
</TABLE>

<PAGE>

                                  MORLEX, INC.
                         (FORMERLY AMERICA ONLINE, INC.)
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   For The Three                    For the Nine
                                                                   Months Ended                     Months Ended
                                                                   September 30,                    September 30,
                                                              2000             1999             2000              1999
<S>                                                         <C>              <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
         Net loss                                           $ (5,575)        $ (4,659)        $(11,345)        $(10,590)
         Increase (decrease) in accrued expenses                  (4)            (945)            (510)             674
                                                            --------         --------         --------         --------

NET CASH USED BY OPERATING ACTIVITIES                         (5,579)          (5,604)         (11,855)          (9,916)
                                                            --------         --------         --------         --------

CASH FLOWS FROM FINANCING ACTIVITIES
         Capital contributed                                       0            8,500                0            9,500
         Shareholder advances                                      0                0            9,000                0
                                                            --------         --------         --------         --------

NET CASH PROVIDED BY FINANCING ACTIVITIES                          0            8,500            9,000            9,500
                                                            --------         --------         --------         --------

NET INCREASE (DECREASE) IN CASH                               (5,579)          (2,896)          (2,855)           (4,16)

BEGINNING CASH BALANCE                                         5,825              352            3,101            3,664
                                                            --------         --------         --------         --------

ENDING CASH BALANCE                                         $    246         $  3,248         $    246         $  3,248
                                                            ========         ========         ========         ========
</TABLE>

<PAGE>

                                  MORLEX, INC.
                         (FORMERLY AMERICA ONLINE, INC.)
                          NOTES TO FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These  financial  statements  have been  prepared in accordance  with  generally
accepted accounting principles for interim financial information and pursuant to
the  rules  and   regulations  of  the   Securities  and  Exchange   Commission.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  accruals)
considered  necessary for fair  presentation  have been included.  The unaudited
financial statements should be read in conjunction with the financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1999.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The  Company  incurred  a net loss of  $5,575  for the three  months  ended
September 30, 2000 and a net loss of $11,345 for the nine months ended September
30,  2000.  Combined  with the fact that the  Company has  virtually  no working
capital and an accumulated  deficit of $352,372,  it is  management's  assertion
that these circumstances may hinder the Company's ability to continue as a going
concern.

     The Company completed two private placements of its Common Stock, par value
$.0001 per share,  in December 1997 and July 1998. In December 1997,  Charles T.
Gould, a director and the Company's  President,  purchased  35,970,000 shares of
Common Stock in exchange for the  cancellation of $49,191 of indebtedness of the
Company to Mr. Gould. In August 1998,  Steven J. Goodman and Lawrence E. Kaplan,
both directors of the Company,  each purchased 94,260,000 shares of Common Stock
in  exchange  for  $3,000  each in cash and  $6,246  each in  previous  services
rendered,  or an  aggregate  of  188,520,000  shares  of  Common  Stock  with an
aggregate  purchase  price of $6,000 in cash and  $12,852 in  previous  services
rendered. The Company currently has virtually no cash or other assets.

     On August 16,  1999,  Steven J.  Goodman,  Lawrence  Kaplan and  Charles T.
Gould,  each  directors and major  shareholders  of the Company,  each purchased
25,000,000 shares of Common Stock in exchange for $2,500 each in cash previously
advanced to the Company.

     Plan  of  Operation.  The  Company  has  not  realized  any  revenues  from
operations in the past two fiscal years,  and its plan of operation for the next
twelve  months shall be to continue its efforts to locate  suitable  acquisition
candidates. The Company can provide no assurance that it can continue to satisfy
its cash requirements for at least the next twelve months.

     The Company  filed,  on June 14, 1999, a Registration  Statement  under the
Securities Exchange Act of 1934 (the "Exchange Act"), on Form 10-SB, pursuant to
which the Company  sought to register its Common  Stock under the Exchange  Act.
The  Registration  Statement  became  effective on August 14, 1999,  and now the
Company intends to seek a listing of its common stock on the Nasdaq OTC Bulletin
Board. The Company believes that it can enhance its  opportunities to acquire or
merge with an  operating  company if its  securities  are listed on the Bulletin
Board. There can be no assurance that the Company's securities will be listed on
the Bulletin Board.

     Liquidity and Capital Resources.  As of September 30, 2000, the Company had
assets consisting of $246 in cash. This compares to assets of $3,101 in cash for
the fiscal year ended December 31, 1999.

     Results of Operations.  The Company has not conducted any active operations
in the  past two  fiscal  years,  except  for its  efforts  to  locate  suitable
acquisition  transactions.  No revenue has been  generated by the Company during
such two-year  period.  It is unlikely the Company will have any revenues unless
it is able to effect an acquisition of or merger with an operating  company,  of
which there can be no assurance.

<PAGE>

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.  To the best knowledge of the officers and directors,
the Company is not party to any legal proceeding or litigation.

Item 2. Changes in Securities. None

Item 3. Defaults Upon Senior Securities. None.

Item 4. Submission of Matters to a Vote of Security Holders. None.

Item 5. Other Information.  On November 7, 2000, the Company filed a Preliminary
Proxy  Statement with the Securities and Exchange  Commission in connection with
the Board of Directors  recommendation  of the approval of a reverse stock split
whereby each issued and outstanding share of Common Stock will be converted into
 .001927029 of a share of Common Stock (the  "Reverse  Stock Split") at a Special
Meeting of the  Shareholders to be held at 36 West 44th Street,  Suite 1201, New
York, New York 10036 on December 5, 2000 at 10:00 a.m.

     The Board of  Directors  has fixed the close of business  on  November  17,
2000, as the record date for  determining the  shareholders  entitled to vote at
the meeting, or any adjournment thereof, and only the holders of Common Stock of
the  Company of record at such date will be entitled to notice of and to vote at
the meeting. Such shareholders may vote in person or by proxy.

     The Board of Directors of the Company  believes that reducing the number of
outstanding shares of Common Stock through the Reverse Stock Split will make the
Company more  attractive  as a potential  acquiror or merger  candidate  with an
operating  company and the Reverse Stock Split will enhance its opportunities to
acquire or merge with an operating  company.  There can be no assurance that the
Company will be able to effect an  acquisition  of, or merger with, an operating
company.

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

     (a)  Exhibit No.                 Description
          27.1                        Financial Data Schedule

     (b)  Reports on Form 8-K.        None.

<PAGE>

                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Date: November 8, 2000

                                              MORLEX, INC.

                                              By: /s/ Lawrence Kaplan
                                                  Lawrence Kaplan, President