SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)

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

                  For the quarterly period ended March 31, 2002

                                       OR

[  ]TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

          From the transition period from ___________ to ____________.

                        Commission File Number 000-31631
                                               ---------


                          PERMA-TUNE ELECTRONICS, INC.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

               Texas                                     75-2510791
----------------------------------             ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation  or  organization)


                 111 SOUTH BIRMINGHAM STEET, WYLIE, TEXAS 75098
                 ----------------------------------------------
                    (Address of principal executive offices)

                                 (972) 442-6774
                                 --------------
                           (Issuer's telephone number)

                                       N/A
              (Former name, former address and former fiscal year,
                         if changed since last report)

         Indicate  by check mark  whether the  registrant  (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 XX          No: __
                               --

As of May  13,  2002  2,312,700  shares  of  Common  Stock  of the  issuer  were
outstanding.


<PAGE>

                         PART I. FINANCIAL INFORMATION

Item 1:  Financial Statements

                          PERMA-TUNE ELECTRONICS, INC.
                             CONDENSED BALANCE SHEET

<TABLE>
                                                                 March 31,          December 31,
                                                                   2002                2001
                                                             ----------------    ----------------
                                                               (Unaudited)
<S>                                                          <C>                 <C>

ASSETS

Current assets:
  Cash                                                          $      507            $     811
  Accounts receivable                                               19,954               16,367
  Inventory                                                         36,324               33,813
  Other                                                                529                  160
                                                             ----------------   -----------------
    Total current assets                                            57,314               51,151

Property and equipment, net                                          5,645                6,486
                                                             ----------------   -----------------
                                                               $    62,959           $   57,637
                                                             ================   =================


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
  Line of credit                                                $   22,800           $   20,800
  Accounts payable                                                  47,517               39,055
  Accrued expenses                                                   5,745                5,744
  Due to stockholder                                                40,000               40,000
                                                             ----------------   -----------------
    Total current liabilities                                      116,062              105,599
                                                             ----------------   -----------------

Stockholders' equity (deficit):
  Common stock, no par value, 10,000,000 shares
    authorized:  2,312,700 shares issued and outstanding:          263,945              263,945
  Accumulated deficit                                             (317,048)            (311,907)
                                                             ----------------   -----------------
    Total stockholders' equity (deficit)                           (53,103)             (47,962)
                                                             ----------------   -----------------
                                                               $    62,959           $   57,637
                                                             ================   =================
</TABLE>


              See accompanying notes to interim condensed financial
                                  statements.


<PAGE>

                          PERMA-TUNE ELECTRONICS, INC.
                        CONDENSED STATEMENT OF OPERATIONS
                                   (Unaudited)

                                                      Three months ended
                                                           March 31,
                                                   2002                2001
                                              ----------------   ---------------

Net sales                                        $    62,563          $  53,319
Cost of goods sold                                    22,323             25,831
                                              ----------------   ---------------
Gross profit                                          40,240             27,488

Operating expenses:
  General and administrative                          36,737             50,396
  Legal and professional                               5,188             30,296
  Research and development                                 -              1,559
  Depreciation                                           841                841
                                              ----------------   ---------------
                                                      42,766             83,092
                                              ----------------   ---------------

Loss from operations                                  (2,526)           (55,604)

Other income (expense):
  Other                                                    -              5,001
  Interest expense                                    (2,615)            (1,414)
                                              ----------------   ---------------
                                                      (2,615)             3,587
                                              ----------------   ---------------
Net loss                                          $   (5,141)       $   (52,017)
                                              ================   ===============

Basic and diluted loss per common share               $(0.00)            $(0.02)
                                              ================   ===============

Weighted average shares outstanding                2,312,700          2,217,700
                                              ================   ===============





              See accompanying notes to interim condensed financial
                                  statements.


<PAGE>

                           PERMA-TUNE ELECTRONIC, INC.
                        CONDENSED STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>

                                                                          Three months ended
                                                                              March 31,
                                                                  -----------------------------------
                                                                       2002                2001
                                                                  -----------------------------------

<S>                                                                   <C>                 <C>

Cash flows from operating activities:
  Net loss                                                            $    (5,141)        $  (52,017)
    Adjustments to reconcile net income to net cash
      provided by (used in) operating activities:
    Depreciation and amortization                                            841                841
  Changes in operating assets and liabilities
    Accounts receivable                                                    (3,587)           (11,956)
    Inventory                                                              (2,511)           11,461
    Prepaid expenses                                                         (369)            3,414
    Accounts payable and accrued expenses                                  8,463             24,939
                                                                  ----------------    ---------------
        Net cash provided by (used in) operating activities                (2,304)           28,699
                                                                  ----------------    ---------------

Cash flows from investing activities:
                                                                  ----------------    ---------------
  Capital expenditures                                                         -                (244)
                                                                  ----------------    ---------------

Cash flows from financing activities:
                                                                  ----------------    ---------------
  Net change in line of credit                                             2,000             19,600
                                                                  ----------------    ---------------

Net increase (decrease) in cash and cash equivalents                         (304)            (3,962)
Cash and cash equivalents at beginning of period                             811             11,046
                                                                  ----------------    ---------------
Cash and cash equivalents at end of period                             $     507          $   7,084
                                                                  ================    ===============

Cash paid for:
  Interest                                                            $    2,615          $   1,414


</TABLE>



              See accompanying notes to interim condensed financial
                                  statements.


<PAGE>

                          PERMA-TUNE ELECTRONICS, INC.
                 NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
                                 March 31, 2002


Note 1: Presentation

The  condensed  balance  sheet of the Company as of March 31, 2002,  the related
condensed statements of operations for the three months ended March 31, 2002 and
2001 and the  statements of cash flows for the three months ended March 31, 2002
and 2001 included in the condensed  financial  statements  have been prepared by
the Company  without  audit.  In the  opinion of  management,  the  accompanying
condensed  financial  statements include all adjustments  (consisting of normal,
recurring  adjustments)  necessary to summarize  fairly the Company's  financial
position  and results of  operations.  The results of  operations  for the three
months  ended March 31, 2002 are not  necessarily  indicative  of the results of
operations  for the full  year or any  other  interim  period.  The  information
included in this Form 10-QSB  should be read in  conjunction  with  Management's
Discussion and Analysis and Financial  Statements and notes thereto  included in
the Perma-Tune Electronics, Inc. December 31, 2001 Form 10-KSB.


<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

This report contains  forward looking  statements  within the meaning of Section
27a of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934.  These  forward  looking  statements  are subject to certain  risks and
uncertainties  that  could  cause  actual  results  to  differ  materially  from
historical  results or  anticipated  results,  including  those set forth  under
"Factors that may affect future  results" in this  Management's  Discussion  and
Analysis of Financial Condition and Results of Operations" and elsewhere in this
report. The following discussion and analysis should be read in conjunction with
"Selected  Financial  Data" and the  Company's  financial  statements  and notes
thereto included elsewhere in this report.

OVERVIEW

Since its  inception,  the Company has focused on the  production,  research and
development  of Porsche and  Ferrari  high  performance  ignition  systems.  The
Company's  principal  source of revenue has been from the Porsche  repair  parts
product  line.  In 1997 the Company  began  development  of new product lines to
supply many repair and performance  parts for a variety of cars and trucks.  The
Company cannot estimate the size of its marketplace.

Production,  profit margin and operational  efficiency have all been improved in
the first quarter of 2002. However,  the Company  experienced  continuing losses
due to the  heavy  burdens  of  legal  and  accounting  expenses  involved  with
fulfilling the requirements of a fully reporting company.  While the Company has
taken  steps to  contain  these  costs,  it still  carries  a high debt load for
services related to these items accrued in the last 36 months. Bringing the bulk
of that work in-house, rather than outsourcing it has reduced administrative and
legal fees associated  with the  preparation of quarterly  filings with the SEC.
The  Company's  decision to change  audit firms in  January,  2002 will  further
reduce these fees for future filings.

Management  believes it is beginning to see the benefits of taking  advantage of
the infrastructure  improvements it has made (implementation of fully integrated
manufacturing/data  base  accounting  software,  the dedication of an officer to
finance/SEC  compliance  and  marketing  planning,  and  outsourcing  of certain
manufacturing functions).

Since the Company has not yet raised  money from its  outstanding  warrants,  we
have  focused on  expanding  our  existing  product  lines to provide  operating
capital. The Company has concentrated its efforts on streamlining and increasing
the  production of its existing  product lines in order to eliminate  backorders
for Porsche products,  and on introducing a new line of spark plug wire sets for
Porsche cars.


<PAGE>

NEW PRODUCTS / RECENT DEVELOPMENTS

The Company has  completed  R&D for a Plasma  Injector  designed for the Porsche
964, a late model Porsche. In the first quarter of 2002, the Company adapted the
964 Plasma Drive technology to the other late model Porsche cars, the models 944
and Carrara.

The Company is currently able to manufacture Plasma Injectors utilizing existing
manufacturing  facilities without incurring  additional  expense.  However,  new
product  development and the expansion of our manufacturing staff and facilities
have been halted pending funding.

In the first quarter of 2002, the Company created the following new products and
set up the  infrastructure  for manufacturing and finished goods in its computer
system: 911SC041,  911SC042,  911SC043,  911041, 911042, 911043, 911020, 911021,
911022, 944, 964 and 911CR.

In the second quarter of 2002, the Company intends to design and set up computer
infrastructure  for  approximately  65 kits that combine its  ignition  systems,
coils, repair harnesses, spark plug wire sets and spark plugs for specific cars.

Market  feedback the Company has received has indicated that mechanics using the
Company's  products  desire a simple,  one-kit  solution  to complex  electrical
problems  on the cars  they  repair.  Wholesale  distributors  gave the  Company
positive  feedback on the  packaging  and  pricing of these kits in  preliminary
discussions.  The  Company  is  preparing  information  packs  and  sample  kits
including CDs with downloadable photographs, technical information, installation
guides and troubleshooting assistance for its distributors,  and expects to ship
them in May, 2002.

MARKETING STRATEGY

Until it is financially  able to put a public  relations  firm on retainer,  the
Company  will  continue  its  current  marketing  strategy of  conducting  sales
training  missions  to its  wholesale  distributors,  continuing  to improve and
expand its website (major revision expected to be posted in mid-May), and making
low-cost postcard mailings to alert distributors to new product  offerings.  The
Company now provides its warehouse  distributors  with compact disks  containing
information on all of its product  offerings in a format that  distributors  can
use to promote the Company's products in their advertising and catalogs.

The Company continues its expansion of its distribution network and now sells to
11  wholesale  distributors  who supply an unknown  number of  distributors  and
retailers. The products of the Company are sold throughout the United States and
are now being sold in Germany and France.
<PAGE>

The Company's  short-term marketing strategy is to begin shipment of Porsche 964
Plasma  Drives  and  several  new   configurations  of  spark  plug  wire  sets.
Implementation  of this  strategy  was begun in the first  quarter of 2002.  The
Company  already has some of these products in inventory and is ready to produce
more. A distribution  network for these parts has already been established.  The
Company is working to expand distribution of these new offerings domestically by
adding new warehouse distributors to its network.

The interim  marketing  strategy is to develop the Honda and Toyota product line
in the third quarter of 2002, and then move on to the  development of the market
for  Perma-Tune  products for domestic  makes in 2003. The product lines require
that  production  tooling be made,  for which funding is currently  unavailable.
Most of the Company's  distribution  network  already  includes Asian car parts.
There is  interest  in the  Perma-Tune  Toyota  repair  parts  because  there is
currently no aftermarket  supply available.  The Company knows of no aftermarket
manufacturing   companies   making   replacement   ignition  modules  for  these
automobiles.

All Perma-Tune  ignition systems  designed for street  vehicles,  except for the
recently introduced products for the Porsche 944, 964 and Carrara, are certified
by California Air Resources Board  Executive  Order D-210.  There was no testing
required  to  obtain  this  certification   because,  in  compliance  with  CARB
regulations,  the Company  was able to state that its  products do not alter the
ignition  timing of the engine.  Therefore,  if the vehicle  meets EPA standards
with its original  ignition system, it will meet EPA standards with a Perma-Tune
ignition system installed on it. The Company anticipates that its newer products
will be certified as well,  since they also do not alter the ignition  timing of
the engine.

MANUFACTURING OVERVIEW

Management has prepared for rapid growth. The Company's  manufacturing technique
is flexible  because of its modular design and it can respond easily to customer
demand.  Modules  can be  mass-produced  and  then  assembled  to meet  changing
purchase  orders.  Production  can be  increased  and  new  products  introduced
readily.  Currently  the  Company  is  operating  at a small  percentage  of its
manufacturing capacity.

COMPARISON OF OPERATING RESULTS

Quarter Ended March 31, 2002 Compared to the Quarter Ended March 31, 2001
-------------------------------------------------------------------------

In the first  quarter of 2002,  the Company  experienced  a 17% sales  growth as
gross sales  increased  from $53,319 in the first  quarter of 2001 to $62,563 in
the first  quarter of 2002. A total of 298 units were sold in the first  quarter
of 2002 at an average price of $183. A total of 251 units were sold in the first
quarter of 2001 at an average price of $185.
<PAGE>

Gross profit in the first quarter of 2002 was $40,240 compared to $27,488 in the
first quarter of 2001. As a percentage of sales,  gross profit  increased in the
first  quarter  of 2002 to 64.3% from  51.5% in the first  quarter of 2001.  The
Company has begun  sub-contracting some  labor-intensive  operations to increase
its gross profit margin and to allow for rapid growth.  The Company  believes it
can  further  improve  its  profit  margin,   as  it  has  lined  up  additional
sub-contractors  to  use  in  this  expense-reducing   effort,  and  will  begin
outsourcing  additional segments of production once capital funding allows us to
take advantage of the economies of scale these  opportunities offer the Company.
The higher the  quantity of parts we can  subcontract  to outside  vendors,  the
better price per piece the Company  will be able to negotiate  with each vendor,
lowering our cost of goods sold and raising our profit margin.  Circuitry  which
is currently hand-made in-house,  can be outsourced for robotic manufacture with
an expected  increase in accuracy and reliability,  but the Company will need to
have the ability to make a large quantity purchase commitment and cover up-front
set-up costs to implement  these  plans.  In all cases,  the Company will retain
control over production of the Perma-Tune  product line and its trade secrets by
manufacturing the key components itself.

General  and  Administrative  (G & A) expenses  were  $36,737 and $50,396 in the
first quarters of 2002 and 2001,  respectively.  As a percentage of sales, G & A
expenses  decreased to 58.7% from 94.5%.  The figures for both 2002 and 2001 are
unusually high by percentage.  The major  components of this atypical result are
extra salaries and wages (with related  payroll taxes) for Company  personnel to
carry out research and development  work, and the internal costs associated with
being a fully reporting company. These expenses have been reigned in by changing
to a more  cost-effective  accounting firm, as well as having in-house personnel
author and edit SEC filings for review by the Company's attorney.

Interest  expenses  increased from $1,414 in the first quarter of 2001 to $2,615
in the first quarter of 2002. This increase  reflects  interest  associated with
agreements with the Company's  previous  accountants to allow the Company to pay
its  outstanding  balances as revenue  became  available  from the collection of
normal  accounts  receivable.  Third-party  debt levels have been reduced in the
first quarter of 2002.  The Company has paid off  outstanding  balances with its
attorneys,  and in  addition  to making  substantial  headway  in paying off its
remaining  balance for  accounting  services,  the Company  made the decision to
change accounting firms in January 2002 in order to substantially  reduce future
expenditures  on  financial  reviews and audits.  This change in audit firms was
reported via a Form 8-K in January, 2002.

Research and  development  expenses were $1,559 in the first quarter of 2001 and
$0 in the first quarter of 2002.  This decrease in R&D  expenditures  was due to
the   deliberate   curtailment  of   expenditures   to  increase  the  Company's
profitability.
<PAGE>

Since the Company  incurred net losses for both the first quarter 2001 and 2002,
there was no income tax  liability  for either  quarter.  The  Company has a net
operating  loss  carry-forward  available in the amount of $317,048 to be offset
against  future income  through years ended  December 31, 2011 through 2021. The
majority of this net operating loss carry-forward, $286,250, has occurred in the
last five  years.  This was the direct  result of  increased  R&D  expenses  for
developing new products as well as the costs associated with the public offering
that will fund the mass production of all product lines.

As of March 31, 2002, the Company's accumulated losses were $317,048.

LIQUIDITY AND CAPITAL RESOURCES

For the quarter ended March 31, 2002 the Company has not generated positive cash
flow from its own operations due to the preliminary  nature of such  operations,
ongoing  investment in research and  development,  and expenditures to build the
appropriate  infrastructure  to support its expected growth.  Consequently,  the
Company has been  dependent on private  placements of its equity  securities and
debt financing to fund its cash  requirements,  as well as revenues  provided by
the normal operations of Perma-Tune.

On March 20, 2002 the  Company  entered  into a $25,000  line of credit with The
American National Bank of Texas in Wylie that is collateralized by the Company's
accounts receivable,  inventory and equipment,  with an initial interest rate of
7.75%.  Interest is variable,  based on the Prime Rate plus 3%. Accrued interest
is payable  monthly,  and the maturity  date is March 20,  2003.  For the period
ended March 31,  2002,  the  principal  balance  owed on this line of credit was
$22,800, with an interest rate of 7.75%.

On December 8, 1997, the Company  issued an offering  circular for 125,000 units
priced at $2.00 per unit. Each unit entitled the investor to one share of common
stock and three stock  purchase  warrants.  Each warrant  entitled the holder to
purchase one share of stock for $2.00. The warrants expire on December 31, 2003.
At December 31, 2001, there are 348,000 warrants outstanding.

Proceeds  from the exercise of warrants are planned to fund  production  tooling
and start up costs of the Honda and Toyota products lines.  The Company plans to
manufacture the required  tooling  estimated at $35,000 in materials and 560 man
hours.  There may be other costs  associated  with  attaining the California Air
Resources  Board  certification  for the Honda,  Toyota and  Porsche 964 product
lines.

As of March 31, 2002 the  Company's  cash  reserves  totaled  $507 and total
current  assets were  $57,314.  The Company is continuing  production  and sales
efforts as well as further research and development and has yet to break even in
terms of both cash flow and  profitability.  For the  remainder of 2002 and into
2003, the Company has no long-term  commitments but expects to incur  additional
costs for  research  and  development.  It also  expects to expand its sales and
marketing  effort.  These efforts could  significantly  increase  demand for the
Company's products beyond the Company's current production  capacity.  While the
Company  believes it can increase its production  capacity to meet sales demand,
significant additional capital could be required to meet expansion requirements.
<PAGE>

Inventory  at March  31,  2002 was  $36,324.  Inventory  at March  31,  2001 was
$33,813.

The Company presently has an outstanding loan payable on demand to Terry Taylor,
a stockholder. Principal balance as of March 31, 2002 is $40,000. The loan bears
interest at a rate of 10%. Interest is payable quarterly. The loan is secured by
inventory.

The  Company's  working  capital  ratio  was 0.5 in the first  quarter  of 2002,
compared with 0.5 in the first quarter of 2001,  remaining  stable.  The Company
will retire accounts payable from income generated by normal operations.  It has
agreements  with  its  former  accounting  firm to pay them as  funding  becomes
available.

The Company's  inventory turnover ratios were .67 and .61 for first quarter 2001
and 2002, respectively, remaining stable.

The Company's accounts  receivable ratios were 26 days and 29 days for the first
quarters of 2001 and 2002,  respectively.  The Company  continues  to manage its
accounts  receivable very  effectively,  collecting  monies due within the terms
offered to its customers.

The Company is taking steps to raise equity  capital.  There can be no assurance
that any new capital  would be available to the Company or that  adequate  funds
for the Company's  operations,  whether from the Company's  revenues,  financial
markets,  or  other  arrangements  will be  available  when  needed  or on terms
satisfactory  to the  Company.  The Company has no  commitments  from  officers,
directors or affiliates to provide funding. The failure of the Company to obtain
adequate additional financing may require the Company to delay, curtail or scale
back some or all of its research and development  programs,  sales and marketing
efforts,  and  manufacturing  operations.  Any additional  financing may involve
dilution to the Company's then-existing shareholders.

Without additional  capital funding,  the Company believes it can operate at its
current level of liquidity for  twenty-four to thirty-six  months.  However,  it
hopes to obtain short-term  funding until operations are ramped up, creating the
profitability that will improve its liquidity position.

OTHER INFORMATION

ITEM 1: Legal Proceedings

None.
<PAGE>

PART II - OTHER INFORMATION

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

a)       Exhibits

         None

         b) Reports on Form 8-K

         On January 17, 2002, the Company filed a report on Form 8-K relating to
a change in auditors  from  Travis  Wolff and  Company,  LLC to Malone & Bailey,
PLLC.


                                   SIGNATURES

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


                                        PERMA-TUNE ELECTRONICS, INC.

Date: May 13, 2002

                                        By: /s/ Linda Decker
                                           -----------------------
                                                Linda Decker
                                                Chief Financial Officer