United States
                       Securities and Exchange Commission
                              Washington D.C. 20549

                                   FORM 10-QSB


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

    For the quarterly period ended September 30, 2000


[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

    For the transition period from ___________ to ____________

                         Commission File Number 0-15304


                               AVESIS INCORPORATED
                     ---------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)

           Delaware                                       86-0349350
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


            3724 North Third Street, Suite 300 Phoenix, Arizona 85012
            ---------------------------------------------------------
                    (Address of principal executive offices)

                                 (602) 241-3400
                          ---------------------------
                          (Issuer's telephone number)

     The  number of  outstanding  shares  of the  registrant's  Common  Stock on
November 6, 2000 was 7,619,297.

            TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (Check One)

                                 [ ] Yes [X] No
<PAGE>
                          PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                               AVESIS INCORPORATED
                                  BALANCE SHEET
                            AS OF SEPTEMBER 30, 2000
                                   (Unaudited)

                                     ASSETS

Current assets:
  Cash and cash equivalents                                         $ 1,968,968
  Receivables, net                                                      487,667
  Prepaid expenses and other                                            190,940
                                                                    -----------
       Total current assets                                           2,647,575
  Property and equipment, net                                           554,908
  Intangibles, net of amortization                                      513,716
  Deposits and other assets                                             538,635
                                                                    -----------
                                                                    $ 4,254,834
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                                  $   476,873
  Current installments of obligations under capital lease                10,288
  Accrued expenses-
     Compensation                                                        27,976
     Other                                                               10,578
  Deferred income                                                        26,277
                                                                    -----------
       Total current liabilities                                        551,992
Obligations under capital lease, excluding current installments           4,139
                                                                    -----------
       Total liabilities                                                556,131
                                                                    -----------
Stockholders' equity:
  Preferred stock $.01 par value, authorized 12,000,000 shares:
    $3.75 Class A, senior nonvoting cumulative convertible
      preferred stock, Series A, $.01 par value; authorized
      1,000,000 shares; 270,260 issued and outstanding
      (liquidation preference of $3.75 per share)                         2,703
    $10 Class A, nonvoting cumulative convertible preferred
     stock, Series 2, $.01 par value; authorized 1,000,000
     shares; 5,000 shares issued and outstanding (liquidation
     preference of $10 per share) and $36,000 of dividends
     in arrears at $7.20 per share; dividends accrue at $.225
     per share per calendar quarter                                          50
  Common stock of $.01 par value, authorized 20,000,000 shares;
    7,619,297 shares issued and outstanding                              76,193
  Additional paid-in capital                                         10,524,189
  Accumulated deficit                                                (6,904,432)
                                                                    -----------
       Total stockholders' equity                                     3,698,703
                                                                    -----------
                                                                    $ 4,254,834
                                                                    ===========

        The accompanying notes are an integral part of these statements.

                                       2
<PAGE>
                               AVESIS INCORPORATED
                            STATEMENTS OF OPERATIONS
       FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                         Quarters Ended                    Nine Months Ended
                                                ------------------------------      ------------------------------
                                                September 30,     September 30,     September 30,     September 30,
                                                    2000              1999              2000              1999
                                                ------------      ------------      ------------      ------------
<S>                                             <C>               <C>               <C>               <C>
Service revenues:
  Administration fees                           $ 1,510,515        $ 2,071,843       $ 4,807,655       $ 6,306,760
  Provider fees                                      22,197             37,685            72,243           110,126
  Buying group                                      332,952            330,984         1,145,575         1,202,176
  Other                                               1,932              2,744             6,381             7,744
                                                -----------        -----------       -----------       -----------
  Total service revenues                          1,867,596          2,443,256         6,031,854         7,626,806
Cost of services                                  1,321,290          1,684,641         4,048,342         5,122,617
                                                -----------        -----------       -----------       -----------
  Income from services                              546,306            758,615         1,983,512         2,504,189
General and administrative expenses                 343,950            284,458         1,042,323           848,382
Selling and marketing expenses                      188,390            277,169           620,483           847,085
Startup costs, license fees related to new
  operations                                         37,537                 --            37,537                --
                                                -----------        -----------       -----------       -----------
  Income from operations                            (23,571)           196,988           283,169           808,722
                                                -----------        -----------       -----------       -----------
Non-operating income:
  Other income                                          620                714             2,436            48,333
  Interest income                                    35,498             28,905           103,273            81,453
  Loss on asset disposal                                 --                 --                --           (18,466)
  Interest expense                                     (438)              (773)           (1,574)           (2,657)
                                                -----------        -----------       -----------       -----------
  Net non-operating income                           35,680             28,846           104,135           108,663
                                                -----------        -----------       -----------       -----------
  Income before income taxes and
   cumulative effect of change in
   accounting principle                         $    12,109        $   225,834       $   387,304       $   917,385

Income taxes                                         10,500                 --            34,141           (38,000)
                                                -----------        -----------       -----------       -----------
Income before cumulative effect of
  change in accounting principle                      1,609            225,834           353,163           955,385
Cumulative effect of change in accounting
  principle, net of income taxes of $51,000              --                 --                --           470,000
                                                -----------        -----------       -----------       -----------
Net Income                                      $     1,609        $   225,834       $   353,163       $ 1,425,385
                                                ===========        ===========       ===========       ===========
Preferred stock dividends                           (23,928)           (26,240)          (71,785)          (78,720)
  Net income (loss) available to common
   stockholders                                 $   (22,319)       $   199,594       $   281,378       $ 1,346,665
                                                ===========        ===========       ===========       ===========
Basic earnings per share:
  Income before cumulative effect of
   change in accounting principle               $      0.00        $      0.03       $      0.04       $      0.12
  Cumulative effect of change in
   accounting principle                                  --                 --                --              0.06
                                                -----------        -----------       -----------       -----------
Net Income                                      $      0.00        $      0.03       $      0.04       $      0.18
                                                ===========        ===========       ===========       ===========
Diluted earnings per share:
  Income before cumulative effect of
   change in accounting principle               $      0.00        $      0.02       $      0.03       $      0.08
  Cumulative effect of change in
   accounting principle                                  --                 --                --              0.05
                                                -----------        -----------       -----------       -----------
Net Income                                      $      0.00        $      0.02       $      0.03       $      0.13
                                                ===========        ===========       ===========       ===========
Weighted average common and equivalent
shares outstanding - Basic                        7,619,297          7,352,482         7,505,698         7,355,011
                                                ===========        ===========       ===========       ===========
Weighted average common and equivalent
shares outstanding - Diluted                     10,487,259         10,550,903        10,668,726        11,342,356
                                                ===========        ===========       ===========       ===========
</TABLE>
        The accompanying notes are an integral part of these statements.

                                       3
<PAGE>
                               AVESIS INCORPORATED
                            STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                     2000             1999
                                                                  -----------     -----------
<S>                                                               <C>             <C>
Cash flows from operating activities:
  Net income                                                      $   353,163     $ 1,425,383
                                                                  -----------     -----------
  Adjustments to reconcile net income to net
    cash (used in) provided by operating activities:
    Depreciation and amortization                                     155,234         103,942
    Cumulative effect of change in accounting principle                    --        (521,000)
    Provision for losses on receivables                                (3,901)         (3,488)
    Loss on disposal of fixed assets                                       --          18,245
    Increase (decrease) in cash resulting from changes in:
     Receivables                                                     (182,718)         (4,384)
     Prepaid expenses and other                                       (13,840)         24,574
     Other assets                                                    (106,127)        (85,969)
     Accounts payable                                                (202,776)       (228,604)
     Accrued expenses                                                 (21,184)        (12,001)
     Deferred income                                                   12,213           1,776
     Accrued rent                                                          --         (33,344)
                                                                  -----------     -----------
        Total adjustments                                            (363,099)       (740,253)
                                                                  -----------     -----------

        Net cash (used in) provided by operating activities            (9,936)        685,130
                                                                  -----------     -----------
Cash flows from investment activities:
  Purchases of property and equipment                                (162,913)       (189,685)
  Asset acquisition                                                  (286,842)             --
  Proceeds from dispositions of property and equipment                     --           9,745
                                                                  -----------     -----------

        Net cash used in investing activities                        (449,755)       (179,940)
                                                                  -----------     -----------
Cash flows from financing activities:
  Principal payments under capital lease obligation                    (9,474)         (8,392)
  Payment of dividend on preferred stock                              (45,606)        (50,821)
  Payments for repurchase of common and preferred stock                    --         (40,125)
                                                                  -----------     -----------

        Net cash used in financing activities                         (55,080)        (99,338)
                                                                  -----------     -----------

        Net (decrease) increase in cash and cash equivalents         (514,771)        405,852

Cash and cash equivalents, beginning of period                      2,483,739       2,181,385
                                                                  -----------     -----------

Cash and cash equivalents, end of period                          $ 1,968,968     $ 2,587,237
                                                                  ===========     ===========
Non-cash investing activities:
  Net assets acquired, financed through the
   issuance of Common Stock                                       $   262,500     $        --
                                                                  ===========     ===========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       4
<PAGE>
                               AVESIS INCORPORATED
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           SEPTEMBER 30, 2000 AND 1999
                                   (Unaudited)

Note 1. Basis of Presentation

     The accompanying  unaudited condensed  consolidated financial statements of
Avesis Incorporated,  and its wholly-owned  subsidiaries,  Avesis of Washington,
D.C., Avesis of New York, Inc., Avesis Third Party Administrators,  Inc., Avesis
Reinsurance  Incorporated and AbsoluteCare,  Inc. (collectively,  the "Company")
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 a complete financial  statement  presentation.  In the opinion of
Management,   such  unaudited  interim  information  reflects  all  adjustments,
consisting only of a normal recurring nature, necessary to present the Company's
financial  position and the results of operations and cash flows for the periods
presented.  The results of operations  for interim  periods are not  necessarily
indicative of the results to be expected for a full fiscal year. These condensed
consolidated  financial  statements  should  be read  in  conjunction  with  the
Company's audited  consolidated  financial  statements included in the Company's
Annual  Report on Form  10-KSB,  for the seven  month  transition  period  ended
December 31, 1999.

Note 2. Earnings per Share

     A summary of the  reconciliation  from basic  earnings per share to diluted
earnings per share for the quarters and nine months ended September 30, 2000 and
1999 follows:

<TABLE>
<CAPTION>
                                                             Quarter ended       Quarter ended
                                                           September 30, 2000  September 30, 1999
                                                           ------------------  ------------------
<S>                                                           <C>                  <C>
Income before cumulative effect of change in
  accounting principle                                        $      1,609         $   225,834
Less: preferred stock dividends                                     23,928              26,240
                                                              ------------         -----------
Income (loss) available to common stockholders                     (22,319)            199,594
                                                              ============         ===========
Basic EPS - weighted average shares outstanding                  7,619,297           7,352,482
                                                              ============         ===========
Basic earnings per share before cumulative effect of
  change in accounting principle                              $       0.00         $      0.03
                                                              ============         ===========
Basic EPS - weighted average shares outstanding                  7,619,297           7,352,482
Effect of dilutive securities:
  Stock Purchase Options - common stock                            152,862             185,734
  Convertible preferred stock                                    2,715,100           3,012,687
                                                              ------------         -----------
Dilutive EPS - weighted average shares outstanding              10,487,259          10,550,903
Income before cumulative effect of change in accounting
  principle                                                   $      1,609         $   225,834
                                                              ------------         -----------
Diluted earnings per share before cumulative effect of
  change in accounting principle                              $       0.00         $      0.02
                                                              ============         ===========
</TABLE>

                                       5
<PAGE>
<TABLE>
<CAPTION>
                                                          Nine Months ended     Nine Months ended
                                                          September 30, 2000    September 30, 1999
                                                              -----------          -----------
<S>                                                       <C>                  <C>
Income before cumulative effect of change in
  accounting principle                                        $   353,163          $   955,385
Less: preferred stock dividends                                    71,785               78,720
                                                              -----------          -----------
Income available to common stockholders                           281,378              876,665
                                                              ===========          ===========
Basic EPS - weighted average shares outstanding                 7,505,698            7,355,011
                                                              ===========          ===========
Basic earnings per share before cumulative effect of
  change in accounting principle                              $      0.04          $      0.12
                                                              ===========          ===========
Basic EPS - weighted average shares outstanding                 7,505,698            7,355,011
Effect of dilutive securities:
  Stock Purchase Options - common stock                           441,629              962,448
  Convertible preferred stock                                   2,721,399            3,024,897
                                                              -----------          -----------
Dilutive EPS - weighted average shares outstanding             10,668,726           11,342,356
Income before cumulative effect of change in accounting
  principle                                                   $   353,163          $   955,385
                                                              -----------          -----------
Diluted earnings per share before cumulative effect of
  change in accounting principle                              $      0.03          $      0.08
                                                              ===========          ===========
</TABLE>

Note 3. Use of Estimates

     Management  of the  Company  has made  certain  estimates  and  assumptions
relating to the  reporting  of assets,  liabilities,  revenues  and  expenses to
prepare  the  financial   statements  in  conformity  with  generally   accepted
accounting principles. Actual results could differ from those estimates.

Note 4. Accounting for Southern States Eye Care, LLC Asset Acquisition

     On March 24, 2000, the Company purchased substantially all of the assets of
Southern  States Eye Care,  LLC for an  aggregate  purchase  price of  $549,342,
including transaction related costs of $36,842. The total purchase price for the
acquisition comprised $250,000 cash and the issuance of 350,000 shares of common
stock valued at $0.75 per share.  The  acquisition  was  accounted for under the
purchase  method.  Results of  operations  are being  recorded  from the date of
acquisition.  The Company recorded preliminary  purchase accounting  adjustments
based on the  relative  fair value of the  assets  acquired.  Goodwill  is being
amortized over eight years on a straight-line basis.

                                       6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2000
        AND 1999

     The  statements   contained  in  this  discussion  and  analysis  regarding
management's anticipation of adequacy of cash reserves for operations,  adequacy
of reserves for claims,  anticipated level of operating  expenses related to new
members,  viability of the Company,  cash flows and marketability of the Company
constitute  "forward-looking"  statements  within  the  meaning  of the  Private
Securities  Litigation  Reform Act of 1995.  Such  statements  involve risks and
uncertainties,  which could cause actual results to differ  materially  from the
forward-looking statements.  Management's anticipation is based upon assumptions
regarding the market in which the Company  operates,  the level of  competition,
the level of demand for  services,  the  stability  of costs,  the  retention of
Sponsors and Members enrolled in the Company's benefit  programs,  the relevance
of the Company's  historical  performance  and the  stability of the  regulatory
environment.  Any of these  assumptions  could prove  inaccurate,  and therefore
there can be no assurance that the forward-looking  information will prove to be
accurate.

     Avesis   Incorporated,   a   Delaware   corporation   (together   with  its
subsidiaries, the "Company"), incorporated in June 1978, markets and administers
vision,  dental,  chiropractic  and hearing  managed care and discount  programs
("Programs")  nationally.  The  Programs  are  designed  to enable  participants
("Members"),  who are enrolled through various sponsoring  organizations such as
insurance   carriers,   HMOs,   Blue  Cross  and  Blue   Shield   organizations,
corporations,  unions and various associations ("Sponsors"),  to realize savings
on  purchases of services and  products  through  networks of providers  such as
ophthalmologists,  optometrists,  opticians, dentists, chiropractors and hearing
specialists ("Providers").

     The Company derives its  administration  fee revenue from plan Sponsors who
customarily  pay a set fee per Member per month.  Administration  fee revenue is
recognized  on the accrual basis during the month that the Member is entitled to
use the benefit.  Certain Sponsors pay for services rendered by the Company on a
fee for  service  basis.  Based upon the type of Program  (e.g.,  managed  care,
discount,  third party administration) the Provider's claim for service provided
to  Members  is paid  either by the  Company,  Sponsor,  Member  or  combination
thereof.  Buying  group  revenues  are  recorded at the total  amount  billed to
participating  Providers  and  recognized  in the month the  product is shipped.
Vision  Provider  fee revenue is based upon a percentage  of  materials  sold by
certain participating Providers under certain plans.

     On March 24, 2000 the Company purchased  substantially all of the assets of
Southern  States Eye Care,  LLC ("SSEC"),  including but not limited to the name
"Southern States Eye Care",  service marks,  trade marks,  trade names,  current
client contracts,  provider contracts and managed care contracts.  The aggregate
purchase  price for the  acquisition  was  $250,000  and  350,000  shares of the
Company's  Common  Stock.  The  Company  used its  existing  cash to finance the
purchase.  The  acquisition  of SSEC  broadens  the  Company's  client  base and
increases the Company's  vision provider  network in Georgia,  Alabama and North
Carolina.  The Company is using the acquired  assets to continue  SSEC's current
lines  of  business,  which  the  Company  is  operating  out of  its  corporate
headquarters in Phoenix, Arizona.

     On  July  24,   2000,   the   Company   incorporated   AbsoluteCare,   Inc.
("AbsoluteCare"  or  "Centers"),   a  wholly  owned  subsidiary,   in  Delaware.
AbsoluteCare  was  established  to create  infectious  disease  centers,  with a

                                       7
<PAGE>
current  concentration on HIV/AIDS  treatment,  on a national basis. The Centers
will perform  medical  services,  laboratory and  pharmaceutical  services.  The
Company's Board of Directors authorized a maximum of $500,000 to be allocated to
the initial startup and operational  expense of the venture,  subject to certain
oversight  and  approval by the Board.  The first center is scheduled to open in
Atlanta during November 2000.

RESULTS OF OPERATIONS:

     The  following  tables  detail the  Company's  major  revenue  and  expense
categories  for the quarters and nine months ended  September  30, 2000 and 1999
(unaudited):

<TABLE>
<CAPTION>
                                    Quarter Ended               Quarter Ended
                                 September 30, 2000           September 30, 1999          Increase/(Decrease)
                            ----------------------------  ---------------------------  ------------------------
                                           % of Total                   % of Total
Revenue:                                 Service Revenue              Service Revenue                  % Change
--------                                 ---------------              ---------------                  --------
<S>                         <C>                <C>        <C>               <C>        <C>                <C>
Total Service Revenue       $ 1,867,596        100%       $2,443,256        100%       $  (575,660)      (24%)
Vision & Hearing Program      1,367,429         73%        1,865,228         76%          (497,799)      (27%)
Vision Provider Fee              22,197          1%           37,685          2%           (15,488)      (41%)
Dental Program                  142,967          8%          206,607          8%           (63,640)      (31%)
Buying Group Program            332,952         18%          330,984         14%             1,968         1%
Expenses:
Cost of Services              1,321,290         71%        1,684,641         69%          (363,351)      (22%)
General & Administrative        343,950         18%          284,458         12%            59,492        21%
Selling & Marketing             188,390         10%          277,169         11%           (88,779)      (32%)

Income from Operations          (23,571)        (1%)         196,988          8%          (220,559)     (112%)
Net Income                        1,609          0%          225,834          9%          (224,225)      (99%)

                                 Nine Months Ended            Nine Months Ended
                                 September 30, 2000           September 30, 1999          Increase/(Decrease)
                            ----------------------------  ---------------------------  ------------------------
                                           % of Total                   % of Total
Revenue:                                 Service Revenue              Service Revenue                  % Change
--------                                 ---------------              ---------------                  --------
Total Service Revenue       $ 6,031,854         100%      $7,626,806        100%       $(1,594,952)      (21%)
Vision & Hearing Program      4,316,408          72%       5,659,933         74%        (1,343,525)      (24%)
Vision Provider Fee              72,243          1%          110,126          1%           (37,883)      (34%)
Dental Program                  491,020          8%          646,797          8%          (155,777)      (24%)
Buying Group Program          1,145,575          19%       1,202,176         16%           (56,601)       (5%)
Expenses:
Cost of Services              4,048,342          67%       5,122,617         67%        (1,074,275)      (21%)
General & Administrative      1,042,323          17%         848,382         11%           193,941         23%
Selling & Marketing             620,483          10%         847,085         11%          (226,602)      (27%)

Income from Operations          283,169          5%          808,722         11%          (525,553)      (65%)
Net Income                      353,163          6%        1,425,385         19%        (1,072,222)      (75%)
</TABLE>

     Past and future  revenues in all lines of business are directly  related to
the number of Members enrolled in the Company's benefit programs. However, there
may be  significant  pricing  differences  to Sponsors  depending on whether the
benefit  offered  is  funded  in part or whole by the plan  Sponsor.  Two  major
Sponsors  accounted  for 25% and 14% of total service  revenues  during the nine
months ended  September 30, 2000, and two major  Sponsors  accounted for 48% and
14% of total service  revenues  during the nine months ended September 30, 1999.
The Company is  substantially  dependent on a limited number of Sponsors and may
be materially  adversely  affected by termination  of its agreements  with those
Sponsors.

                                       8
<PAGE>
     The decrease in total service  revenues in the nine months ended  September
30, 2000 is  principally  due to a vision plan  Sponsor that is not renewing the
benefit for their  Members upon their annual  renewal but instead is providing a
lesser  benefit   internally.   As  of  September  30,  2000,  the  Company  had
approximately  44,000  Members from this Sponsor,  as compared to  approximately
192,000 Members as of December 31, 1999 and approximately  215,000 Members as of
September 30, 1999.  During  September 2000, the Company entered into a contract
with this Sponsor to provide benefits to  approximately  25,000 of their Members
on an ongoing  basis.  The  Company is  anticipating  the loss of the  remaining
19,000  Members  from this  Sponsor  as they  renew  their  benefits  during the
upcoming  year.  The  Company's  vision and hearing  revenue  received from this
Sponsor  decreased  by  approximately  $2,150,000  during the nine months  ended
September  30, 2000 as compared to the nine months  ended  September  30,  1999.
Except for revenues from this sponsor, the Company's vision and hearing revenues
increased by  approximately  $800,000 during the nine months ended September 30,
2000 as  compared  to the  nine  months  ended  September  30,  1999,  of  which
approximately $695,000 was from former clients of SSEC.

     The Company had  approximately  1,429,000 vision and 13,000 hearing Members
as of September  30, 2000  compared to  approximately  710,000  vision and 4,000
hearing Members as of September 30, 1999. The vision Member counts for September
30, 2000 include  approximately 843,000 Members received through the transaction
with SSEC.  The vision and hearing  revenue  derived from the Sponsors  from the
SSEC  transaction  accounted for 18% of the Company's total service revenues for
the quarter  ended  September 30, 2000,  and 12% of the Company's  total service
revenues for the nine months ended  September  30, 2000.  The revenue and profit
expected  to be derived per Member  under  SSEC's  vision  benefit  program,  in
general,  is less than the revenue  and profit  derived  from the  Sponsor  that
decreased  its  Membership,  as  described  above,  due  to the  provision  of a
different  level of benefit.  The decrease in vision and hearing  revenue during
the  quarter and nine months  ended  September  30, 2000 as compared to the same
periods in the  previous  fiscal year was the result of the vision plan  Sponsor
mentioned above, partially offset by the revenue derived from the former clients
of SSEC.  Other changes in the number of vision and hearing Members occurred due
to Sponsors'  employee or Member  fluctuations in the normal course of business.
Vision provider fee revenue  remained  constant as a percentage of total service
revenues from the nine months ended  September 30, 1999 to the nine months ended
September 30, 2000.

     The Company had  approximately  67,000  dental  Members as of September 30,
2000, compared to approximately 124,000 dental Members as of September 30, 1999.
The decline of the Company's dental program revenue and membership resulted from
two Sponsors' discontinuation of their dental benefit program that resulted in a
loss of approximately 54,000 Members and the loss of approximately 2,000 Members
from a Sponsor who did not renew its contract with the Company.  There also have
been  reductions  in Members  from  various  Sponsors  in the  normal  course of
business.

     To minimize  the  Company's  risk  related to its  dependence  on a limited
number of  Sponsors,  the  Company has  developed  the Avesis  Advantage  Vision
Program and the Avesis  Advantage  Dental Program.  These insured products allow
the Company to market and contract  directly  with  employers,  unions and other
groups  either  through  the  Company's  internal  sales  staff  or  the  broker
community.  The Company  derived its first  revenues  from its Avesis  Advantage
Vision  Program in December  1999,  and had  approximately  1,800  Members as of
September  30,  2000.  The Company has revised  its  projection  concerning  the
timeframe  in which it  expects  to derive  its first  revenues  from the Avesis
Advantage  Dental Program from the fourth quarter of calendar 2000 to the second
half of calendar 2001.

                                       9
<PAGE>
     The Company makes available to its vision  Providers a buying group program
that enables the Provider to order  eyeglass  frames from the  manufacturers  at
discounts from wholesale costs. These discounted prices are generally lower than
a Provider could negotiate individually, due to the large volume of purchases of
the buying group.

     Costs of Services  primarily relate to servicing  Members,  Providers,  and
Sponsors under the Company's vision, hearing and dental benefit programs as well
as the cost of frames that are sold through the  Company's  buying group program
as discussed  above.  The increase in Cost of Services as a percentage  of total
service revenues in the current quarter, compared to the corresponding period in
the prior year resulted from an increase in claims experience as a percentage of
revenue from the newly acquired accounts from SSEC, as mentioned above.

     General and  Administrative  expenses  increased as a  percentage  of total
service  revenue  during the quarter and nine months  ended  September  30, 2000
compared  to the  corresponding  periods in the prior year due to  increases  in
depreciation  and  amortization  related to the Company's new computer  systems,
amortization of goodwill created by the SSEC  transaction,  increases in payroll
related to  administrative  functions  and  increases in the payments  under the
Company's  Management  Agreement and  Investment  Advisor  Agreement,  both with
affiliated entities.

     Selling and marketing expenses include marketing fees, broker  commissions,
inside sales and marketing salaries and related expenses,  travel related to the
Company's sales  activities and an allocation of related  overhead  expenses.  A
significant amount of the Company's marketing  activities has been outsourced to
a management consultant, National Health Enterprises (an affiliate). Selling and
marketing  expenses  declined  slightly as a percentage of total service revenue
during the quarter and nine months ended  September  30, 2000 as compared to the
corresponding  periods in the prior year due to the absence of sales commissions
on the newly acquired SSEC accounts.

LIQUIDITY AND CAPITAL RESOURCES

     The Company had cash and cash equivalents of $1,968,968 as of September 30,
2000,  compared to $2,483,739 as of December 31, 1999.  The decrease of $514,771
is primarily due to the Company's  cash payment of $250,000 for the  acquisition
of the assets of Southern States Eye Care, LLC on March 24, 2000 and the capital
expenditures  related to the development of  AbsoluteCare.  Current cash on hand
and cash  provided  from  operations is expected to allow the Company to sustain
operations for the foreseeable future.

     The Company is party to a revolving  credit  facility  for an amount not to
exceed  $100,000.  The credit  facility  allows the Company to better manage its
cash  liquidity.  To date,  the  Company  has never  drawn  funds on the  credit
facility.

     As of  September  30, 2000,  the Company had $476,873 of Accounts  Payable,
compared to $679,649 as of December 31, 1999.  Included in Accounts  Payable are
reserves for claims for managed care accounts of  approximately  $ 331,000 as of
September  30, 2000,  and  approximately  $451,000 as of December 31, 1999.  The
reserves are for incurred but not reported claim reimbursements to Providers who
participate in certain managed care programs.  The Company believes this reserve
is adequate based upon historical trends.

                                       10
<PAGE>
     The Company expects to pay dividends of approximately $46,000 on the Series
A Preferred Stock on December 1, 2000.

YEAR 2000 COMPLIANCE

     The Company so far has  experienced  no disruptions in the operation of its
internal information systems during the transition to the year 2000. The Company
is not aware  that any of its  vendors or clients  experienced  any  disruptions
during  their  transition  to the year 2000 or that there has been any year 2000
issues with its  services  provided.  The Company  will  continue to monitor the
transition  to year 2000 and will act  promptly  to resolve  any  problems  that
occur.  If  the  Company  or any  third  parties  with  which  it  has  business
relationships  experience problems related to the year 2000 transition that have
not yet been discovered, it could have a material adverse impact on the Company.

                                       11
<PAGE>
                            PART II OTHER INFORMATION

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

(b)  The Certificate of Designation for the Company's Class A, Senior  Nonvoting
     Cumulative  Convertible Preferred Stock, Series A, restricts the payment of
     dividends  on the  Company's  Series 2  Preferred  Stock and Common  Stock.
     Accordingly,  the  Company  may not pay the  quarterly  dividend  otherwise
     scheduled  for  payment  during  October  2000,  on shares of its  Series 2
     Preferred  Stock.  Such  dividend  is  cumulative,  and the total  dividend
     arrearage is $36,000,  or $7.20 per share, as of September 30, 2000 for all
     5,000 shares outstanding.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  See Exhibit Index  following the  Signatures  page,  which is  incorporated
     herein by reference.

(b)  No reports on Form 8-K were filed during the quarter  ended  September  30,
     2000.

                                       12
<PAGE>
                                   SIGNATURES

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


                               AVESIS INCORPORATED
                               -------------------
                                  (Registrant)



Date: 11/13/00                          /s/ Alan S. Cohn
      --------                          ----------------------------------------
                                        Alan S. Cohn, Chief Executive Officer
                                        and President



Date: 11/13/00                          /s/ Joel H. Alperstein
      --------                          ----------------------------------------
                                        Joel H. Alperstein, Chief Financial
                                        Officer and Treasurer

                                       13
<PAGE>
                               Avesis Incorporated
                                  Exhibit Index
              Form 10-QSB for the Quarter Ended September 30, 2000


                                                       Incorporated by
Exhibit No.           Description                      Reference from the:
-----------           -----------                      -------------------

  10.22      Lease Agreement between Absolute        Filed herewith
             Care, Inc. and NORO-Broadview
             Holding Company, B.V.

  11         Statement re: Computation of per        Earnings (Loss) per Share
             Share Earnings                          Computation, see Note 2 to
                                                     the Notes to Condensed
                                                     Consolidated Financial
                                                     Statements

  27         Financial Data Schedule                 Filed herewith