FORTUNE ENTERTAINMENT CORPORATION 9-30-04 10-QSB
                                  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, 2005

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
        For the transition period from ________________ to ______________

                         Commission file number: 0-30292

                        FORTUNE ENTERTAINMENT CORPORATION
        (Exact name of small business issuer as specified in it charter)

             DELAWARE                                    88-0405437
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

           8687 West Sahara Avenue, Suite 150, Las Vegas, Nevada 89117
                    (Address of principal executive offices)

                                 (702) 614-6124
                           (Issuer's telephone number)

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 such shorter
period that the issuer 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 ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the issuer filed all documents and reports required to be filed
by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.     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: As of September 30, 2005 the issuer
had 36,885,129 shares of $.0001 par value common stock outstanding.

Transitional Small Business Disclosure Format (Check one):   Yes [ ]  No [X]


<PAGE>

                                      INDEX


                                                                            Page

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Consolidated Balance Sheets - September 30, 2005
         (unaudited) and December 31, 2004 .................................  3

         Consolidated Statements of Operations and Deficit
         (Unaudited) - Three Months Ended September 30,
         2005 and 2004 .....................................................  4

         Consolidated Statements of Operations & Deficit
         (Unaudited) - Nine Months Ended September 30, 2005
         and 2004 and for the period from January 1, 2002
         (date of new development stage) to September 30, 2005 .............  5

         Consolidated Statements of Cash Flows
         (Unaudited) - Nine Months Ended September 30, 2005
         and 2005 and for the period from January 1, 2002
         (date of new development stage) to September 30, 2005 .............  6

         Notes to the Consolidated Financial Statements ....................  7

Item 2.  Plan of Operation .................................................  9

Item 3.  Controls and Procedures ........................................... 10

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings ................................................. 11

Item 2.  Changes in Securities ............................................. 11

Item 3.  Defaults upon Senior Securities ................................... 11

Item 4.  Submission of Matters to a Vote of Security Holders ............... 11

Item 5.  Other Information ................................................. 11

Item 6.  Exhibits and Reports on Form 8-K .................................. 11

Signatures ................................................................. 13



                                        2
<PAGE>

                        FORTUNE ENTERTAINMENT CORPORATION
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS

                                                  September 30,   December 31,
                                                      2005            2004
                                                  ------------    ------------
                                                   (Unaudited)    (See Note 1)

                          ASSETS

Current assets
 Cash                                             $         28    $      7,693
 Accounts receivable                                      --              --
 Inventory                                                --              --
                                                  ------------    ------------
                                                            28           7,693

Property and equipment, net of accumulated
  depreciation of $1,000 $1,260 and $847                 5,633           3,390
Deposits and other                                       5,252           5,252
                                                  ------------    ------------
TOTAL ASSETS                                      $     10,913    $     16,335
                                                  ============    ============

        LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current liabilities
 Accounts payable and accrued liabilities         $    840,763    $    844,831
 Accrued liabilities                                 1,270,184       1,017,778
 Lease Guarantees                                       45,425            --
 Loans payable                                         212,500         193,000
                                                  ------------    ------------
     Total current liabilities                       2,368,872       2,055,609

               STOCKHOLDERS' (DEFICIT):

Preferred stock, $0.0001 par value,
 convertible Class A, B and C Preferred
 stock; 5,000,000 shares authorized,
 4,691; 4,691; 5,357 shares issued and
 outstanding                                                 1               1
Common stock, $0.0001 par value, 40,000,000
 shares authorized, 36,885,129 and 4,608,674
 shares issued and outstanding at September 30,
  2005 and December 31, 2004, respectively               3,689           3,605
Additional paid-in capital                          16,146,194      16,083,279
Shares to be issued                                    124,100         124,100
Accumulated (deficit)                              (13,996,849)    (13,996,849)
Accumulated (deficit) during development stage      (4,635,094)     (4,253,410)
                                                  ------------    ------------
     Total stockholders' (deficit)                  (2,357,959)     (2,039,274)
                                                  ------------    ------------
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)     $     10,913    $     16,335
                                                  ============    ============

The accompanying notes are an integral part of the consolidated financial
statements.

                                        3
<PAGE>

                        FORTUNE ENTERTAINMENT CORPORATION
                          (A Development Stage Company)
                 CONSOLIDATED STATEMENTS OF OPERATIONS & DEFICIT
                                   (UNAUDITED)

                                                      Three Months Ended
                                                         September 30,
                                                     2005            2004
                                                 ------------    ------------
Operating expenses:
  Impairment                                     $       --      $  1,288,557
  Depreciation                                            283          10,000
  Salaries and consulting fees                         92,500         116,715
  General and administrative                            9,210          38,270
  Legal and accounting                                 18,069          37,582
  Rent                                                  1,000          19,869
  Travel and Entertainment                               --            21,950
                                                 ------------    ------------
     Total operating expenses                         121,062      (1,532,943)
                                                 ------------    ------------
     Net operating (loss)                            (121,062)     (1,532,943)

Other income (expense):
  Other                                                  --               606
  Interest expense:                                   (10,162)           --
                                                 ------------    ------------
     Total other income (expense)                     (10,162)            606
                                                 ------------    ------------
Net (loss)                                           (131,224)     (1,532,337)

Basic and diluted loss per share                 $        Nil    $       (.06)
                                                 ============    ============
Weighted average common
 shares outstanding                                36,885,129      26,064,844
                                                 ============    ============


The accompanying notes are an integral part of the consolidated financial
statements.

                                        4
<PAGE>
<TABLE>
<CAPTION>

                        FORTUNE ENTERTAINMENT CORPORATION
                          (A Development Stage Company)
                 CONSOLIDATED STATEMENTS OF OPERATIONS & DEFICIT
                                   (UNAUDITED)
                                                                     For the Period From
                                                                       January 1, 2002
                                                                        (date of new
                                           Nine Months Ended          development stage)
                                             September 30,             to September 30,
                                         2005            2004                2005
                                     ------------    ------------    -------------------
<S>                                  <C>             <C>             <C>
Operating expenses:
  Impairment                         $     11,400    $  1,288,557          2,564,470
  Depreciation                                848          10,500             15,108
  Salaries and consulting fees            242,500         521,715          1,380,875
  General and administrative               38,578          76,091            242,074
  Legal and accounting                     55,585          78,793            284,295
  Rent                                      7,984          22,081             61,256
  Travel and entertainment                    550          31,358             27,804
                                     ------------    ------------       ------------
     Total operating expenses             357,445       2,029,095          4,575,882
                                     ------------    ------------       ------------
     Net operating (loss)                (357,445)     (2,029,095)        (4,575,882)

Other income (expense):
  Other                                     2,533           5,959             14,189
  Interest (expense)                      (26,772)         (7,467)           (96,863)
  Interest income                            --              --               23,462
                                     ------------    ------------       ------------
     Total other (expense)                (24,239)         (1,508)           (59,212)
                                     ------------    ------------       ------------
Net (loss)                           $   (381,684)   $ (2,030,603)      $ (4,635,094)
                                     ============    ============       ============

Basic and diluted loss per share     $       (.01)   $       (.14)      $       (.31)
                                     ============    ============       ============
Weighted average common
 shares outstanding                    36,885,129      14,555,624         15,149,118
                                     ============    ============       ============

</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.

                                        5
<PAGE>
<TABLE>
<CAPTION>

                        FORTUNE ENTERTAINMENT CORPORATION
                          (A Development Stage Company)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                   (UNAUDITED)

                                                                        For the Period From
                                                                          January 1, 2002
                                                                            (date of new
                                              Nine Months Ended          development stage)
                                                September 30,             to September 30,
                                            2005            2004                2005
                                        ------------    ------------    -------------------
<S>                                     <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net (loss) for the period              $   (381,684)   $ (2,030,603)       $(4,635,094)
 Adjustments to reconcile
  net loss to net cash used
  in operating activities:
  Impairment                                  11,400       1,288,557          2,564,470
  Stock issued for services                     --           255,000            267,500
  Depreciation                                   848          10,500             15,108
  Accrued interest income on
   note receivable                              --              --              (23,462)
 Changes in operating assets
 and liabilities:
  Inventory                                     --           (34,386)              --
  Accounts receivable                           --            (4,855)              --
  Deposits and prepaid expenses                 --           (10,342)               389
  Accounts payable and accrued
   liabilities                               293,066         180,575          1,421,163
  Capital lease payable                         --             6,917               --
  Lease guarantees                            45,425            --               45,425
  Other                                         --            42,774               --
                                        ------------    ------------        -----------
Net Cash Provided by (Used in)
 Operating Activities                        (30,945)       (295,863)          (344,501)

CASH FLOWS FROM INVESTING ACTIVITIES:
 Acquisition of property and
  equipment                                   (3,091)        (63,233)            (3,741)
 Investments                                    --            (2,500)          (394,586)
                                        ------------    ------------        -----------
Net Cash (Used in) Investing
 Activities                                   (3,091)        (65,733)          (398,327)

CASH FLOWS FROM FINANCING ACTIVITIES:
 Issuance of stock for cash                     --           418,775            475,339
 Advances from related parties                26,371            --              237,517
 Borrowing from unrelated
  parties                                       --              --               30,000
                                        ------------    ------------        -----------
Net Cash Provided by
 Financing Activities                         26,371         418,775            742,856

NET INCREASE IN CASH                          (7,665)         57,179                 28
CASH AT BEGINNING OF PERIOD                    7,693              89               --
                                        ------------    ------------        -----------
CASH AT END OF PERIOD                   $         28    $     57,268                 28
                                        ============    ============        ===========
</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.
                                        6
<PAGE>

                        FORTUNE ENTERTAINMENT CORPORATION
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2005
                                   (UNAUDITED)

1.   UNAUDITED STATEMENTS

The balance sheet as of September 30, 2005, the statements of operations and the
statements of cash flows for the nine month periods ended September 30, 2005 and
2004, have been prepared by Fortune Entertainment Corporation (Company) without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures, normally included in
the financial statements prepared in accordance with accounting principles
generally accepted in the United States of America, have been condensed or
omitted as allowed by such rules and regulations, and the Company believes that
the disclosures are adequate to make the information presented not misleading.
In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to fairly present the financial position,
results of operations and changes in financial position at September 30, 2005
and for all periods presented, have been made. It is suggested that these
statements be read in conjunction with the December 31, 2004 audited financial
statements and the accompanying notes included in the Company's Annual Report on
Form 10-KSB, filed with the Securities and Exchange Commission.

2.   PRINCIPLES OF CONSOLIDATION

The condensed consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, Fortune Entertainment Corporation
(Bahamas), Fortune Entertainment Corporation (British Columbia, Canada), Fortune
Poker Inc. (Delaware), Diabetes Education Sources, LLC (DES) (Florida), and
Freedom Medical Sources, LLC (FMS) (Florida). All significant inter-company
accounts and transactions have been eliminated.

3.   RELATED PARTY TRANSACTIONS

During the nine months ended September 30, 2005 the Company borrowed $26,371
from a shareholder of the Company. The loans are uncollateralized, do not bear
interest and have no repayment terms.

4.   BASIS OF PRESENTATION - GOING CONCERN

The accompanying financial statements have been prepared in conformity with U.S.
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. However, the Company is in default on its notes
payable and various accounts payable and has suffered recurring losses from
operations and discontinued operations, has a stockholders' deficiency and a
negative working capital that raise substantial doubts about its ability to
continue as a going concern. Management is attempting to raise additional
capital.

In view of these matters, realization of certain assets in the accompanying
balance sheet is dependent upon continued operations of the Company which, in
turn, is dependent upon the Company's ability to meet its financial
requirements, raise additional capital as needed, and the success of its future
operations.

                                        7
<PAGE>


Management believes that its ability to raise additional capital provides an
opportunity for the Company to continue as a going concern.

5.  LEASE GUARANTEES

During the second quarter ended June 30, 2005, the Company incurred a liability
for two office equipment leases totaling approximately $45,425.
















                                        8
<PAGE>

Item 2.  Plan of Operation.

Statements contained herein which are not historical facts are forward-looking
statements as that term is defined by the Private Securities Litigation Reform
Act of 1995. Although the Corporation believes that the expectations reflected
in such forward-looking statements are reasonable, forward-looking statements
are subject to risks and uncertainties that could cause actual results to differ
from those projected. The Corporation cautions investors that any
forward-looking statements made by the Corporation are not guarantees of future
performance and that actual results may differ materially from those in the
forward-looking statements. Such risks and uncertainties include, without
limitation: established competitors who have substantially greater financial
resources and operating histories, regulatory delays or denials, ability to
compete as a start-up company in a highly competitive market, and access to
sources of capital.

     The following discussion and analysis should be read in conjunction with
our financial statements and notes thereto included elsewhere in this Form
10-QSB. Except for the historical information contained herein, the discussion
in this Form 10-QSB contains certain forward-looking statements that involve
risks and uncertainties, such as statements of our plans, objectives,
expectations and intentions. The cautionary statements made in this Form 10-QSB
should be read as being applicable to all related forward-looking statements
wherever they appear in this Form 10-QSB. The Corporation's actual results could
differ materially from those discussed here.

Company History and Recent Developments

     Fortune Entertainment Corporation (the "Company") is a Delaware corporation
which was incorporated on August 25, 1997. The Company was initially formed to
acquire, develop, and sell casino games and capitalize on a patented technology
utilized in video poker machines. The technology was promising but never gained
the accreditation needed to make it marketable.

     Effective August 13, 2004, the Company acquired the outstanding equity
interest in two related companies, Diabetes Education Sources, LLC (DES) and
Freedom Medical Sources, LLC (FMS), pursuant to a Membership Interest Purchase
Agreement between the Company, DES and FMS. Pursuant to the agreement, the
Company issued an aggregate of 10,000,000 shares of restricted stock to the
members of DES and FMS in exchange for 100% of the outstanding membership
interest in each entity. As a result of the transactions, DES and FMS became
wholly-owned subsidiaries of the Company. In a contemporaneous transaction, the
Company acquired certain assets, and assumed certain liabilities, all of which
are used in the business of DES and FMS, from Alpha & Omega Marketing and
Distribution (Alpha), an entity affiliated with DES and FMS. Pursuant to an
agreement for Purchase of Assets between the Company and Alpha, the Company
issued 4,670,000 shares of restricted common stock to Alpha in exchange for
assets consisting of cash accounts, fixed assets, automobiles, a security
deposit, and loan receivables (primarily loan receivables from DES and FMS). The
Company canceled the loan receivables due from DES and FMS. The Company also
assumed an office lease, agreed to repay an outstanding balance on a line of
credit, and assumed a capital lease on the phone equipment.


                                        9
<PAGE>

     By mutual agreement of the parties, an Agreement to rescind the DES/FMS
transactions consummated in August 2004 was voted on and passed by the Board. An
ongoing need to attract the additional capital necessary to sustain the
infrastructure necessary for growing the businesses and a failure to reach
projected sales and revenue projections precipitated these actions. The DES/FMS
LLCs were returned to selling members along with all licensees and
registrations. Cash and revenues in process will be used for payables. All
shares issued, assets and liabilities transferred, remain in place. Resignations
for Ms. Dudley and Mrs. Peters, officers of DES/FSM respectively, were accepted
by the Board of Directors in the meeting on April 25, 2005.

     The Company is a development stage enterprise and has no current operating
revenue, but is continuing to attempt to develop its marketing relationships of
diabetes related products. In addition, management has been actively seeking
business opportunities, such as a potential merger with, or acquisition of, one
or more private companies.

     There can be no assurance that the Company will be able to continue as a
going concern, or achieve material revenues and profitable operations. It
requires additional financing, and no assurances can be given that financing
will be available in the amounts required, or that, if available, will be on
terms satisfactory to the Company.

     During the past two fiscal years, the Company has funded its operations and
capital expenditures primarily through loans from officers, shareholders and
third parties. As of August 17, 2005 the Company did not have any commitments
from any source to provide capital and did not have any lines of credit or other
available financing. There is no assurance that the Company will be able to
obtain the capital it will need or that the Company's estimates of its capital
requirements will prove to be accurate.

Item 3.  Controls and Procedures.

     Based on their most recent evaluation, which was completed as of the end of
the period covered by this periodic report on Form 10-QSB, the Company's Chief
Executive Officer and Chief Financial Officer believe the Company's disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are
effective to ensure that information required to be disclosed by the Company in
this report is accumulated and communicated to the Company's management,
including its principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure. During the
fiscal quarter to which this report relates, there were no significant changes
in the Company's internal controls or other factors that could significantly
affect these controls subsequent to the date of their evaluation and there were
no corrective actions with regard to significant deficiencies and material
weaknesses.


                                       10
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

     Any outstanding are settled

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

         None

Item 3.  Defaults Upon Senior Securities.

         None

Item 4.  Submission of Matters To A Vote of Security Holders.

         None

Item 6.  Exhibits

     (a) Exhibits

       Exhibit No.    Description

          2.1         Membership Interest between the Corporation and Diabetes
                      Education Sources, LLC and Freedom Medical Sources, LLC
                      dated August 13, 2004. (Incorporated by reference to
                      Exhibit 2.1 of the current report on Form 8-K filed August
                      13, 2004.)

          3.2         Bylaws currently in effect.  (Incorporated by reference
                      to Exhibit 2.2 of the Registration Statement on Form
                      10-SB (File No. 0-23859) effective December 30, 1998.)

          3.3         Certificate of Designation, Preferences and Rights of
                      Series A Preferred Stock.  (Incorporated by reference
                      to Exhibit 3.1 of the Registration Statement on Form
                      10-SB (File No. 0-23859) effective December 30, 1998.)

          3.4         Certificate of Designation, Preferences and Rights of
                      Series B Preferred  Stock.  (Incorporated by reference
                      To Exhibit 3.2 of the Registration Statement on Form
                      10-SB (File No. 0-23859) effective December 30, 1998.)

          3.5         Certificate of Designation, Preferences and Rights of
                      Series C Preferred Stock (Incorporated by reference to
                      Exhibit 3.3 of the Registration Statement Form 10-SB
                     (File No. 0-23859) effective December 30, 1998.)

          3.6         Certificate of Amendment currently in effect. Incorporated
                      by reference to Exhibits of the quarterly report in form
                      10-QSB for period ended September 30, 2004.

         10.17        1998 Incentive Stock Option Plan.  (Incorporated by
                      reference to Exhibit 10.17 of the Annual Report on Form
                      10-KSB for the year ended December 31, 1998.)

                                       11
<PAGE>

         10.18        1998 Stock Bonus Plan.  (Incorporated by reference to
                      Exhibit 10.18 of the Annual Report on Form 10-KSB for
                      the year ended December 31, 1998.)

         10.19        Agreement for Purchase of Assets between the Corporation
                      and Alpha & Omega Marketing and Distribution dated August
                      13, 2004. (Incorporated by reference to Exhibit 10.19 of
                      the current report on Form 8-K filed August 13, 2004.)

         31.1         Section 302 Certification by the Corporation's Chief
                      Executive Officer. (Filed electronically herewith.)

         31.2         Section  302 Certification by the Corporation's Chief
                      Financial Officer. (Filed electronically herewith.)

         32.1         Section 906 Certification by the Corporation's Chief
                      Executive Officer. (Filed electronically herewith.)

         32.2         Section 906 Certification by the Corporation's Chief
                      Financial Officer. (Filed electronically herewith.)










                                       12
<PAGE>


                                   SIGNATURES

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

                                Fortune Entertainment Corporation


                                By: /s/ Douglas R. Sanderson
                                    Douglas R. Sanderson
                                    Chairman, Chief Executive Officer,
                                    President and Director


                                By: /s/ Phillip Verrill
                                    Phillip Verrill
                                    Chief Financial Officer

Date: November 18, 2005










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