SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


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

For the quarterly period ended June 30, 2001

[ ]      TRANSITIONAL  REPORT  UNDER  SECTION  13  OR  15(d)  OF  THE SECURITIES
         EXCHANGE ACT OF 1934 (No Fee Required)

                           Commission File No. 0-32585


                          Parallax Entertainment, Inc.
              ----------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

               Texas                                     75-2713701
   -------------------------------                 --------------------------
   (State or other jurisdiction of                    (I.R.S. Employer
    incorporation of organization)                     Identification No.)

             14110 N. Dallas Parkway, Suite 130, Dallas, Texas 75254
        ----------------------------------------------------------------
                     (Address of principal executive office

                                 (972) 726-9203
                          ----------------------------
                           (Issuer's telephone number)

         Check whether the issuer has (1) filed all reports  required by Section
12 or 15(d) of the Exchange  Act during the past 12 months,  and 2) been subject
to such filing requirements for the past ninety (90) days. Yes [ ] No [X ]

         As of June 30, 2001, 1,106,300 shares of Common Stock were outstanding.

<PAGE>
<TABLE>
<CAPTION>

                          PARALLAX ENTERTAINMENT, INC.
                                 BALANCE SHEETS

                                     Assets
                              June 30, December 31,
                                                                      2001           2000
                                                                  -----------    -----------
                                                                  (Unaudited)
<S>                                                               <C>            <C>
Current assets:
       Cash                                                       $    95,225    $      --
       Accounts receivable, trade                                      10,500         10,500
       Receivables from related parties                                60,563         10,998
       Advances to bands, less allowance of $27,503 as of
            June 30, 2001 and December 31, 2000                        30,019         17,201
       Prepaid expenses, principally rent                              25,500           --
       Inventory                                                        7,181          1,746
                                                                  -----------    -----------
            Total current assets                                      228,988         40,445
                                                                  -----------    -----------

Furniture and equipment                                                17,697         17,592
Less accumulated depreciation                                          (9,810)        (7,410)
                                                                  -----------    -----------
                                                                        7,887         10,182
                                                                  -----------    -----------

Other assets:
       Deposits                                                        10,817          1,317
                                                                  -----------    -----------
                                                                  $   247,692    $    51,944
                                                                  ===========    ===========

                 Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
       Bank overdraft                                             $      --      $     1,314
       Accounts payable                                                43,855         41,162
       Accrued expenses                                                51,881         52,915
       Payable to principal stockholder                                  --           13,060
       Notes payable                                                    8,500          8,500
       Current portion of convertible notes payable                    28,500         30,500
                                                                  -----------    -----------
            Total current liabilities                                 132,736        147,451

Convertible notes payable                                                --             --
                                                                  -----------    -----------
            Total liabilities                                         132,736        147,451
                                                                  -----------    -----------

Commitments and contingencies                                            --             --

Stockholders' equity (deficit):
       Common stock, $.01 par value, 10,000,000 shares
            authorized, 1,106,300 and 888,800                          11,063          8,888
            shares issued and outstanding, respectively
       Additional paid-in capital                                   1,214,642        781,817
       Accumulated deficit                                         (1,110,749)      (886,212)
                                                                  -----------    -----------
            Total stockholders' equity (deficit)                      114,956        (95,507)
                                                                  -----------    -----------
                                                                  $   247,692    $    51,944
                                                                  ===========    ===========

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                          PARALLAX ENTERTAINMENT, INC.
                            STATEMENTS OF OPERATIONS


                                                 Three Months Ended             Six Months Ended
                                                      June 30,                      June 30,
                                                 2001           2000           2001           2000
                                             -----------    -----------    -----------    -----------
                                                    (Unaudited)                   (Unaudited)
<S>                                          <C>            <C>            <C>            <C>

Revenues                                     $     8,076    $    15,834    $     9,130    $    22,618
                                             -----------    -----------    -----------    -----------

Expenses
       Cost of sales                               9,361          4,819          9,655         10,160
       Recording costs                             3,200            807          5,773          4,807
       Selling, general and administrative       139,269         78,813        214,873        200,831
       Debt conversion expense                      --           85,500         85,500
                                             -----------    -----------    -----------    -----------
            Total expenses                       151,830        169,939        230,301        301,298
                                             -----------    -----------    -----------    -----------

            Loss from operations                (143,754)      (154,105)      (221,171)      (278,680)


Interest expense                                  (1,665)        (2,130)        (3,366)        (4,875)
                                             -----------    -----------    -----------    -----------


       Net loss                              $  (145,419)   $  (156,235)   $  (224,537)   $  (283,555)
                                             ===========    ===========    ===========    ===========


Basic loss per common share                  $     (0.13)   $     (0.18)   $     (0.20)   $     (0.34)
                                             ===========    ===========    ===========    ===========

Weighted average number of
       common shares outstanding               1,065,466        852,350      1,025,942        790,062
                                             ===========    ===========    ===========    ===========

</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                          PARALLAX ENTERTAINMENT, INC.
                            STATEMENTS OF CASH FLOWS
                     Six Months Ended June 30, 2001 and 2000



                                                                2001         2000
                                                              ---------    ---------
                                                                    (Unaudited)
<S>                                                           <C>          <C>
Cash flows from operating activities:
       Net loss                                               $(224,537)   $(283,555)
       Adjustments to reconcile net loss to net
          cash used by operating activities:
           Depreciation                                           2,400        1,200
           Debt conversion expense                                 --         85,500
           Stock issued for services                               --         68,500
           Changes in assets and liabilities:
               Accounts receivable, trade                          --        (10,500)
               Receivables from related parties                 (49,565)     (25,010)
               Receivables from band members                    (12,818)     (29,714)
               Inventories                                       (5,435)        --
               Prepaid expenses and deposits                    (35,000)        (175)
               Accounts payable                                   2,693      (23,281)
               Accrued expenses                                  (1,034)       8,079
                                                              ---------    ---------
                  Net cash used by operating activities        (323,296)    (208,956)
                                                              ---------    ---------

Cash flows from investing activities:
       Additions to equipment                                      (105)     (10,000)
                                                              ---------    ---------

Cash flows from financing activities:
       Bank overdraft                                            (1,314)      (8,936)
       Proceeds from issuance of common stock                   435,000      398,355
       Net change in advances from principal stockholder        (13,060)     (51,692)
       Change in notes payable                                   (2,000)     (28,500)
       Proceeds from convertible notes payable                     --           --
                                                              ---------    ---------
                  Net cash provided by financing activities     418,626      309,227
                                                              ---------    ---------

Net change in cash and temporary investments                     95,225       90,271

Cash and temporary investments at beginning of year                --           --
                                                              ---------    ---------

Cash and temporary investments at end of year                 $  95,225    $  90,271
                                                              =========    =========


Supplemental disclosures of cash flow information:

       Interest paid                                          $    --      $    --
                                                              =========    =========

</TABLE>

Non-cash transactions:
       During the year ended December 31, 2000, the Company converted $61,000 of
       convertible debt into 48,800 shares of common stock.

       During the year ended  December  31,  1999,  the  Company  converted  the
       shareholder advance of $50,000 into additional paid-in capital.


<PAGE>

1.     BASIS OF PRESENTATION

       The  accompanying  unaudited  financial  statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-QSB of Regulation S-B. They do
not  include all  information  and  footnotes  required  by  generally  accepted
accounting  principles for complete  financial  statements.  However,  except as
disclosed herein, there has been no material change in the information disclosed
in the notes to the financial  statements  for the year ended  December 31, 2000
included in the  Company's  Form 10-SB filed with the  Securities  and  Exchange
Commission.  The  interim  unaudited  financial  statements  should  be  read in
conjunction with those financial  statements  included in the Form 10-SB. In the
opinion  of  Management,   all  adjustments  considered  necessary  for  a  fair
presentation, consisting solely of normal recurring adjustments, have been made.
Operating  results for the six months  ended June 30,  2001 are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
2001.

<PAGE>


Item 2.
-------

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

       From   Parallax's   inception   through  June  30,  2001,  we  have  been
unsuccessful  in generating any material  amount of revenue while incurring huge
losses.  We have  relied  primarily  on capital  raised from  investors  and the
receipt of services  in exchange  for  Parallax  stock on which to operate.  The
following   summary   financial   information   illustrates  our  historic  poor
performance and poor prospects for the future:

                             Three-Months Ended            Six-Months Ended
                                 March 31                       June 30
                                 --------                       -------

                             2001        2000              2001         2000
                             ----        ----              ----         ----

  Revenues                  $  8,076    $ 15,834        $    9,130     $ 22,618
  --------

  Loss                     ($145,419)  ($156,235)      ($  224,537)   ($283,555)
  ----

  Accumulated Deficit      ($965,330)  ($416,005)      ($1,110,749)   ($572,240)
  -------------------

       As of December 31, 2000,  Parallax had a working  capital deficit of over
$107,000.  Because we have raised cash through the sale of stock, as of June 30,
2001, we had approximately  $96,000 in working capital.  However,  we still have
not generated any significant revenues and unless we do so we will again run out
of cash.  It is doubtful  that we will be able to  continue to raise  capital by
selling  our  stock to  investors  if we do not  begin to  generate  substantial
revenues  from the sale of our artists'  records and products.  Our  significant
operating losses, working capital deficits and accumulated  stockholders' equity
deficits  raise  substantial  doubt  about our  ability to  continue  as a going
concern.

       We have not had any material  changes in our revenue  streams  during the
reporting  periods.  Our  revenues  for the  2001  reporting  periods  decreased
primarily  because the members of one of our artist bands,  Hellafied Funk Crew,
decided not to play together any longer.  We increased SG&A expenses  during the
2001 reporting periods in an attempt to generate more sales.

<PAGE>

       We have incurred losses  primarily  because we have generated very little
revenue  from  record  sales  or any  other  source  to cover  normal  operation
expenses. One of the bands that we had under contract,  Hellafied Funk Crew, has
disbanded.  Therefore we will not receive any material amount of future revenues
from  records  and  product  sales of this band.  In order to address the causes
underlying the losses, as an additional potential form of revenue,  Parallax may
license to third  parties the master  recordings  and  compositions  it owns. In
addition,  Parallax  intends  to  differentiate  itself in order to  effectively
compete  with those  labels,  which  seek only to license or sell  rights to the
major labels by manufacturing, distributing and promoting products at the retail
level.  Parallax intends to utilize radio promotion,  in store point of purchase
vehicles, radio advertising and industry media to promote its artists.  Parallax
anticipates  selling products at live concert venues and to utilize  independent
record  promoters  to assist in  obtaining  radio air play in major  markets  to
increase  product  awareness and sales.  Additionally,  Parallax intends to work
with  distributors to implement  promotions at retail sites to increase  product
sales.

       Parallax  anticipates  having substantial cash flow or liquidity problems
in the next 12 months. Parallax may be required to reduce its planned operations
if we are unable to raise  additional  capital.  We may not be able to  continue
operations and we may go out of business. At present, Parallax is not in default
or in breach of any lease or any other  obligation or  indebtedness,  except for
$28,500 in 18% senior secured  convertible  notes that are past due and interest
has not been paid.  However,  Parallax has not  received any default  letters or
other communications from the holders of the past due notes. At present, we have
no  significant  amount of trade  payables  that have not been paid  within  the
stated  trade  term.  Parallax  is not  presently  subject  to  any  unsatisfied
judgments, liens or settlement obligations.

       If we  are  unable  to  raise  sufficient  working  capital  of at  least
$1,500,000, Parallax may reduce its planned operations and implement its further
development  at a reduced  scale and a lesser pace,  resulting in smaller  sales
volumes than currently  planned.  There can be no assurance that we will be able
to raise additional funds on favorable terms, if at all.

<PAGE>

                                     PART II
                                OTHER INFORMATION
Item 3.
-------

DEFAULTS UPON SENIOR SECURITIES.

       See  discussion  under Item 2 above  covering  the  $28,500 in 18% senior
secured convertible notes that are past due.

                                   SIGNATURES

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

                                        Parallax Entertainment, Inc.

Date: August 20, 2001                   By /s/ Gust Kepler
                                        ------------------------------------
                                        President and C.E.O