SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                   FORM 10QSB


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


For Quarter Ended                                 Commission File Number
-----------------                                 ----------------------
September 30, 2001                                      000-31553


                            HOUSTON OPERATING COMPANY
                       ----------------------------------
             (Exact name of registrant as specified in its charter)


            Delaware                                     76-0307819
--------------------------------                        -------------------
     (State of incorporation)                           (I.R.S. Employer
                                                        Identification No.)

                    11145 Rockland Drive, Littleton, CO 80127
            ---------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:  (720) 981-0523


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                                  Yes  X       No
                                     -----        ------
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                7,795,171 common shares as of September 30, 2001

<PAGE>

HOUSTON OPERATING COMPANY, INC.

                              Financial Statements
              For the Three Month Period Ended September 30, 2001
                                  (Unaudited)

<PAGE>


                      PART I.  FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS


                           Michael Johnson & Co. LLC
                           9175 E. Kenyon Ave., #100
                                Denver, CO 80237
                                 (303) 796-0099
                               FAX (303) 796-0137



           REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


To the Board of Directors
Houston Operating Company, Inc.
Littleton, Colorado

We have reviewed the accompanying balance sheet of Houston Operating Company,
Inc. as of September 30, 2001 and the related statements of operations for the
three month and nine months period ended September 30, 2001 and 2000, and the
cash flows for the nine months ended September 30, 2001 and 2000 included in the
accompanying Securities and Exchange Commission Form 10-QSB for the period ended
September 30, 2001. These financial statements are the responsibility of the
Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements as a whole.
Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of December 31, 2000, and the related statements
of operations, stockholders' equity and cash flows for the year then ended (not
presented herein). In our report dated April 10, 2001, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying balance sheet as of September 30, 2001
is fairly stated in all material respects in relation to the balance sheet from
which it has been derived.


/s/ Michael Johnson & Co., LLC.
Michael Johnson & Co., LLC.
Denver, Colorado
November 8, 2001



                                      F-1


<PAGE>
<TABLE>
<CAPTION>


                        HOUSTON OPERATING COMPANY, INC.
                                 BALANCE SHEETS
                                  (Unaudited)



                                                                  September 30,    December 31,
                                                                    2001               2000
                                                               ----------------    -------------
<S>                                                                    <C>              <C>
ASSETS:
Current Assets:
  Cash                                                                   $ 512            $ 541
                                                               ----------------    -------------
     Total Current Assets                                                  512              541
                                                               ----------------    -------------

TOTAL ASSETS                                                             $ 512              541
                                                               ================    =============

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
  Accounts payable and accrued expenses                                $ 1,383          $ 1,353
  Advances from shareholders'                                            1,896            1,896
                                                               ----------------    -------------
    Total Current Liabilities                                            3,279            3,249
                                                               ----------------    -------------


Stockholders' Deficit:
  Common stock, $.001 par value; 50,000,000
    shares authorized; 7,795,171 shares issued
     and outstanding, respectively                                       7,795            7,795
  Additional paid-in capital                                            38,350           38,350
  Retained deficit                                                     (48,912)         (48,853)
                                                               ----------------    -------------

Total Stockholders' Deficit                                             (2,767)          (2,708)
                                                               ----------------    -------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                              $ 512            $ 541
                                                               ================    =============

</TABLE>


                        See accountant's review report.

                                      F-2

<PAGE>

<TABLE>
<CAPTION>

                                        HOUSTON OPERATING COMPANY, INC.
                                            STATEMENTS OF OPERATIONS
                                                  (Unaudited)






                                                          Three Months Ended                     Nine Months Ended
                                                             September 30,                           September 30,
                                                       2001                2000               2001               2000
                                                      ------              ------             ------             ------
<S>                                                    <C>                  <C>               <C>                <C>
REVENUES:                                                    $ -                  $ -               $ -                $ -


OPERATING EXPENSES:
  Sales and marketing                                          -                    -                 -                  -
  General and administrative                                  30                4,000                59              4,474
                                                  ---------------    -----------------    --------------     --------------
Total Operating Expenses                                      30                4,000                59              4,474
                                                  ---------------    -----------------    --------------     --------------
Net Loss from Operations                                     (30)              (4,000)              (59)            (4,474)
                                                  ---------------    -----------------    --------------     --------------
Other Income and expenses:
  Interest income                                              -                    -                 -                  -
  Interest expense                                             -                    -                 -                  -
  Other                                                        -                    -                 -                  -
                                                               -                    -                 -                  -
                                                  ---------------    -----------------    --------------     --------------
Net Loss                                                   $ (30)            $ (4,000)            $ (59)          $ (4,474)
                                                  ===============    =================    ==============     ==============

Weighted average number of
  shares outstanding                                   7,795,171            5,795,171         7,795,171          5,795,171
                                                  ===============    =================    ==============     ==============

Basic and diluted net loss per share                     *                   *                  *                  *
                                                  ===============    =================    ==============     ==============

* Less than $.01

</TABLE>

                        See accountant's review report.
                                      F-3

<PAGE>

<TABLE>
<CAPTION>

                                HOUSTON OPERATING COMPANY, INC.
                         STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                          (Unaudited)

                                                                                     Additional
                                                           Common Stock                Paid-In         Accumulated
                                                     Shares           Amount           Capital          Deficit       Totals
<S>                                                   <C>                <C>             <C>             <C>            <C>

Balance -  December 31, 1997                          2,795,171          $ 2,795         $ 28,820        $ (38,874)     $ (7,259)

Net loss for period                                           -                -                -           (1,725)       (1,725)
                                                      ---------          -------         --------        ----------     ---------
Balance - December 31, 1998                           2,795,171            2,795           28,820          (40,599)       (8,984)
                                                      ---------          -------         --------        ----------     ---------
Conversion of loan payable to additional paid-in
 capital                                                      -                -            9,530                -         9,530
Net loss for year                                             -                -                -           (1,000)       (1,000)
                                                      ---------          -------         --------        ----------     ---------
Balance - December 31, 1999                           2,795,171            2,795           38,350          (41,599)         (454)
                                                      ---------          -------         --------        ----------     ---------
Stock issuance for cash                               1,000,000            1,000                -                -         1,000
Stock issuance for services                           4,000,000            4,000                -                -         4,000
Net loss for year                                             -                -                -           (7,254)       (7,254)
                                                      ---------          -------         --------        ----------     ---------
Balance - December 31, 2000                           7,795,171            7,795           38,350          (48,853)       (2,708)
                                                      ---------          -------         --------        ----------     ---------
Net loss for period                                           -                -                -              (59)          (59)
                                                      ---------          -------         --------        ----------     ---------
Balance - September 30, 2001                          7,795,171          $ 7,795         $ 38,350        $ (48,912)     $ (2,767)
                                                      ---------          -------         --------        ----------     ---------
</TABLE>


                        See accountant's review report.

                                      F-4

<PAGE>

<TABLE>
<CAPTION>

                        HOUSTON OPERATING COMPANY, INC.
                            STATEMENTS OF CASH FLOWS
                                  (Unaudited)

                                                                    Nine Months Ended
                                                                      September 30,
                                                                  2001             2000
                                                                --------         --------
<S>                                                                  <C>           <C>
Cash Flows From Operating Activities:
  Net (Loss)                                                         $ (59)         $(4,474)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
   Stock issued for services                                             -            4,000
   Changes in assets and liabilities:
    Increase in accounts payable                                        30                -
                                                                        30            4,000
Net Cash Used in Operating Activities                                  (29)            (474)

Cash Flow From Financing Activities:
  Advances from Stockholders                                             -              474
  Issuance of Common Stock                                               -            1,000
  Net Cash Provided By Financing Activities                              -            1,474

Increase (Decrease) in Cash                                            (29)           1,000

Cash and Cash Equivalents - Beginning of period                        541                -

Cash and Cash Equivalents - End of period                            $ 512          $ 1,000
                                                              =============     ============

Supplemental Cash Flow Information:
  Interest paid                                                        $ -              $ -
                                                              =============     ============
  Taxes paid                                                           $ -              $ -
                                                              =============     ============

</TABLE>

                        See accountant's review report.
                                      F-5

<PAGE>

                         HOUSTON OPERATING COMPANY, INC.
                          NOTES TO FINANCIAL STATEMENTS


1.       Presentation of Interim Information

     In the opinion of the management of Houston Operating Company, Inc., the
     accompanying unaudited financial statements include all normal adjustments
     considered necessary to present fairly the financial position as of
     September 30, 2001, and the results of operations for the three month and
     nine months ended September 30, 2001 and 2000, and cash flows for the nine
     months ended September 30, 2001 and 2000. Interim results are not
     necessarily indicative of results for a full year.

     The financial statements and notes are presented as permitted by Form
     10-QSB, and do not contain certain information included in the Company's
     audited financial statements and notes for the fiscal year ended December
     31, 2000.







                                      F-6

<PAGE>

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2001

The Company had no income in the nine month period ended  September  30, 2001 or
2000 but incurred expenses of $59 for 2001 and $4,474 for 2000. The loss for the
nine month  period for 2001 was ($59) and in 2000 it was  $(4474).  The loss per
share was less than ($.01) in the period in 2001 and none in 2000.

For the current fiscal year the Company anticipates incurring a loss as a result
of legal and accounting  expenses,  expenses  associated with registration under
the Securities and Exchange Act of 1934, and expenses  associated  with locating
and evaluating  acquisition  candidates.  The Company  anticipates  that until a
business  combination is completed with an  acquisition  candidate,  it will not
generate  revenues,  and will  continue  to operate at a loss prior to and after
completing a business combination depending upon the performance of the acquired
business.

RESULTS OF  OPERATIONS  FOR THE QUARTER  ENDED  SEPTEMBER  30, 2001  COMPARED TO
QUARTER ENDED SEPTEMBER 30, 2000

The Company had no revenues in the quarter in 2001 or 2000. The Company incurred
expenses of $30 in the quarter in 2001 compared to $4000 in the quarter in 2000.
The loss for the quarter was ($30) in 2001 and $4000 in 2000.  The Company had a
loss per share of less than  ($.01) in the quarter in 2001 and ($.01) in 2000 in
the quarter.


LIQUIDITY AND CAPITAL RESOURCES

The Company does not have capital  sufficient to meet the Company's  cash needs,
including the costs of compliance with the continuing reporting  requirements of
the  Securities and Exchange Act of 1934. The Company will have to seek loans or
equity  placements to cover such cash needs.  In the event the Company isable to
complete a business combination during this period, lack of its existing capital
may be a  sufficient  impediment  to prevent it from  accomplishing  the goal of
completing a business combination.  There is no assurance, however, that without
funds it will ultimately  allow  registrant to complete a business  combination.
Once a business  combination  is completed,  the Company's  needs for additional
financing are likely to increase substantially.

Irrespective of whether the Company's cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuances of stock in lieu of cash.


<PAGE>


                           PART II - OTHER INFORMATION


ITEM 1.           LEGAL PROCEEDINGS

                  None

ITEM 2.           CHANGES IN SECURITIES

                  None

ITEM 3.           DEFAULT UPON SENIOR SECURITIES

                  None

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  None

ITEM 5.           OTHER INFORMATION

                  None

<PAGE>




           Appointment of New Directors and Resignation of Directors

                None

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                        Reports on Form 8-K were  made for the  period for which
                  this  report is filed.  None.


<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Date: 11/14/01

                                              HOUSTON OPERATING COMPANY


                                              /s/ J.R. Nelson
                                              -----------------------------
                                              J.R. NELSON, President