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 September 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 [X] No [ ]

     As  of  November  13,  2001,   59,805,940   shares  of  Common  Stock  were
outstanding. This number reflects the equivalent number of shares after a 20 for
one stock split paid on November 2, 2001.

<PAGE>
<TABLE>
<CAPTION>

                                     PART I
                              FINANCIAL INFORMATION

Item 1.
-------

FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS

                          PARALLAX ENTERTAINMENT, INC.
                                 BALANCE SHEETS

                                     Assets
                                                                                      September 30,      December 31,
                                                                                           2001               2000
                                                                                     ----------------   ----------------
                                                                                       (Unaudited)
<S>                                                                                    <C>                <C>

Current assets:
      Cash                                                                             $    33,372        $      --
      Accounts receivable, trade                                                               900             10,500
      Receivables from related parties                                                     103,685             10,998
      Advances to bands, less allowance of $27,503 as of
           September 30, 2001 and December 31, 2000                                         35,586             17,201
      Prepaid expenses, principally rent                                                    23,998               --
      Inventory                                                                              7,164              1,746
                                                                                       -----------        -----------
           Total current assets                                                            204,705             40,445
                                                                                       -----------        -----------

Furniture and equipment                                                                     17,697             17,592
Less accumulated depreciation                                                              (11,010)            (7,410)
                                                                                       -----------        -----------
                                                                                             6,687             10,182
                                                                                       -----------        -----------

Other assets:
      Deposits                                                                              10,817              1,317
                                                                                       -----------        -----------
                                                                                       $   222,209        $    51,944
                                                                                       ===========        ===========

                 Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
      Bank overdraft                                                                   $      --          $     1,314
      Accounts payable                                                                      47,199             41,162
      Accrued expenses                                                                      53,790             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                                                       137,989            147,451

Convertible notes payable                                                                     --                 --
                                                                                       -----------        -----------
           Total liabilities                                                               137,989            147,451
                                                                                       -----------        -----------

Commitments and contingencies                                                                 --                 --

Stockholders' equity (deficit):
      Common stock, $.01 par value, 200,000,000 shares
           authorized, 22,772,000 and 17,776,000                                           227,720            177,760
           shares issued and outstanding, respectively
      Additional paid-in capital                                                         1,202,861            753,545
      Accumulated deficit                                                               (1,346,361)        (1,026,812)
                                                                                       -----------        -----------
           Total stockholders' equity (deficit)                                             84,220            (95,507)
                                                                                       -----------        -----------
                                                                                       $   222,209        $    51,944
                                                                                       ===========        ===========
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                          PARALLAX ENTERTAINMENT, INC.
                            STATEMENTS OF OPERATIONS

                                                 Three Months Ended              Nine Months Ended
                                                   September 30,                   September 30,
                                                 2001            2000            2001            2000
                                            ------------    ------------    ------------    ------------
                                                    (Unaudited)                     (Unaudited)
<S>                                         <C>             <C>             <C>             <C>

Revenues                                    $      9,475    $      5,307    $     18,605    $     27,926
                                            ------------    ------------    ------------    ------------
Expenses
      Cost of sales                                8,748           3,618          19,288          14,029
      Recording costs                               --               101           5,773           4,658
      Selling, general and administrative         91,289          92,026         308,062         297,662
      Debt conversion expense                       --            97,500         183,000
                                            ------------    ------------    ------------    ------------
           Total expenses                        100,037         193,245         333,123         499,349
                                            ------------    ------------    ------------    ------------
           Loss from operations                  (90,562)       (187,938)       (314,518)       (471,423)
Interest expense                                  (1,665)         (1,439)         (5,031)         (6,314)
                                            ------------    ------------    ------------    ------------
      Net loss                              $    (92,227)   $   (189,377)   $   (319,549)   $   (477,737)
                                            ============    ============    ============    ============
Basic loss per common share                 $      (0.00)   $      (0.01)   $      (0.02)   $      (0.03)
                                            ============    ============    ============    ============
Weighted average number of
      common shares outstanding               22,317,100      17,572,000      20,914,820      16,213,240
                                            ============    ============    ============    ============

</TABLE>





<PAGE>
<TABLE>
<CAPTION>

                          PARALLAX ENTERTAINMENT, INC.
                            STATEMENTS OF CASH FLOWS
                  Nine Months Ended September 30, 2001 and 2000



                                                              2001         2000
                                                            ---------    ---------
                                                                  (Unaudited)
<S>                                                         <C>          <C>

Cash flows from operating activities:
      Net loss                                              $(319,549)   $(477,737)
      Adjustments to reconcile net loss to net
         cash used by operating activities:
         Depreciation                                           3,600         --
         Debt conversion expense                                 --        183,000
         Stock issued for services                               --         68,500
         Changes in assets and liabilities:
            Accounts receivable, trade                          9,600      (10,500)
            Receivables from related parties                  (92,687)     (28,770)
            Receivables from band members                     (18,385)     (56,851)
            Inventories                                        (5,418)         200
            Prepaid expenses and deposits                     (33,498)
            Accounts payable                                    5,707      (24,929)
            Accrued expenses                                      875        6,314
                                                            ---------    ---------
                Net cash used by operating activities        (449,755)    (340,773)
                                                            ---------    ---------

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                  499,606      481,805
      Net change in advances from principal stockholder       (13,060)     (58,126)
      Change in notes payable                                  (2,000)     (61,000)
      Proceeds from convertible notes payable                    --           --
                                                            ---------    ---------
                Net cash provided by financing activities     483,232      353,743
                                                            ---------    ---------

Net change in cash and temporary investments                   33,372        2,970

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

Cash and temporary investments at end of year               $  33,372    $   2,970
                                                            =========    =========


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>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 nine  months  ended  September  30,  2001  are not  necessarily
indicative of the results that may be expected for the year ending  December 31,
2001.



2. STOCK SPLIT

Effective October 22, 2001, the Board of Directors  approved a 20 for 1 split of
the Company's common shares.  The Record Date of the split was November 2, 2001.
All share and per share amounts in the  accompanying  financial  statements have
been retroactively adjusted to reflect the split.

<PAGE>

Item 2.
-------

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

     From  Parallax's  inception  through  September  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         Nine-Months Ended
                           September 30              September 30

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

Revenues               $   9,475    $   5,307    $  18,605    $  27,926
--------

Loss                   ($ 92,227)   ($189,377)   ($319,549)   ($477,737)
----



     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 September
30, 2001, we had  approximately  $66,500 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.  We increased SG&A expenses during the 2001 reporting periods
in an attempt to generate more sales.

     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.

<PAGE>


     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.

     Once the Company begins to generate fees from online artist  promotions and
sees  profits  being  derived  from the  release and sale of  completed  CDs and
merchandise, management is confident that Parallax Entertainment will be able to
meet its minimum  operating  requirements.  The Company then anticipates  having
funds available for the acquisition of further artist contracts that it can then
develop on an on-going basis.

"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT:

     The above  information  contains  certain  forward-looking  statements  and
information  relating to the Company that is based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to  the  Company  or  management.   When  used  in  this  document,   the  words
"anticipate,"   "believe,"   "estimate,"  "expect,"  and  "intend"  and  similar
expressions,  as they relate to the Company or its  management,  are intended to
identify forward-looking statements. Such statements reflect the current view of
the  Company   regarding  future  events  and  are  subject  to  certain  risks,
uncertainties, and assumptions,  including risks and uncertainties noted. Should
one or more of these risks or uncertainties  materialize,  or should  underlying
assumptions  prove  incorrect,  actual  results may vary  materially  from those
described herein as anticipated,  believed,  estimated, expected or intended. In
each instance,  forward-looking information should be considered in light of the
accompanying  meaningful cautionary statements herein.  Factors that could cause
results to differ  include,  but are not limited to,  successful  performance of
internal  plans,  the impact of  competitive  services and pricing,  and general
economic risks and uncertainties.



                                     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.

Item 4.
-------

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     On August 29, 2001 Articles of Amendment  were approved by written  consent
of  stockholders  owning a majority of the  outstanding  Capital Stock,  and the
Articles of Amendment were filed and accepted by the Secretary of State of Texas
on  September  14,  2001 with a  delaying  provision  that it would  not  become
effective  until 20 days  after the  record  date of the  Information  Statement
delivered  to  shareholders  of record as of October 2,  2001.  The  Information
Statement,  which  includes a copy of the  Articles of  Amendment is attached as
Exhibit  10.1.  The Articles of  Amendment  increased  the number of  authorized
shares of Common Stock from  10,000,000  to  200,000,000  shares and  authorized
1,000,000 of a preferred class of stock.

<PAGE>

     On August 29, 2001, the  Stockholders  owning a majority of the outstanding
Capital  Stock also  approved the "2001 Stock Option Plan" (The Plan) by written
consent.  The Plan reserves an aggregate of 550,000  shares of pre-split  common
stock for  issuance  pursuant  to the  exercise  of stock  options  which may be
granted  to  key  employees  and  non-employee  directors  of  the  Company  and
independent  contractors and consultants to the Company. The company plans to do
an S-8 registration of these shares in the near future.  The Plan is included in
the  Information  Statement  issued to shareholders of record on October 2, 2001
(Exhibit 10.1).


Item 5.
-------

OTHER INFORMATION.

     On October 1, 2001,  the Board of Directors  approved a resolution to issue
Gust Kepler 1,500,000 shares of restricted,  pre-split stock as compensation for
services as President and CEO of the Company.

     On October 15, 2001, the Board of Directors  approved a resolution to enter
into a  consulting  agreement  with Kevin B.  Halter for  110,000  shares of the
Company's  stock.  The stock was  registered  in a Form S-8 filed on October 15,
2001,  and is  incorporated  by  reference  to this Form  10-QSB and made a part
hereof.

     On October 30, 2001, the Board of Directors  approved a resolution to enter
into a consulting/production agreement with Stanley Abbott for 200,000 shares of
the Company's  stock.  The stock was registered in the Form S-8 referenced above
and is incorporated by reference to this Form 10-QSB and made a part hereof.

     On  October  22,  2001 the Board of  Directors  approved a 20 for one stock
dividend of the  Company's  common  stock.  The  "Record  Date" of the split was
November 2, 2001 and the "Pay Date" was November 5, 2001.  There were  2,990,297
shares issued and  outstanding  on November 2, 2001, an equivalent of 59,805,940
post split shares.


Item 6.
-------

EXHIBITS
     See Exhibits and Exhibit Index below.

REPORTS  ON FORM 8-K
     Not applicable.

<PAGE>

                                   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: November 13, 2001                            By: /s/ Gust Kepler
                                                      --------------------------
                                                       Gust Kepler
                                                       President and CEO


                                  EXHIBIT INDEX
                                  -------------

No.         Description                     Document              Page
---         -----------                     --------              ----
10.         Additional Exhibits
10.1                                   Information Statement      E-1

10.2                                   Form S-8(10/15/01)          *



*The above  documents are  incorporated by reference to the Company's SEC Files,
No. 000-32585.