<PAGE>   1
                                  UNITED STATES
                       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, 2001.

                                       OR

[ ]       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934
          FOR THE TRANSITION FROM _______ TO ________.

                        COMMISSION FILE NUMBER 000-26175


                           DISCOVERY INVESTMENTS, INC.
                 -----------------------------------------------
             (Exact name of registrant as specified in its charter)

                   Nevada                             88-0409151
          -----------------------                -------------------
      (State or other jurisdiction of              (I.R.S. Employer
       incorporation or organization)             Identification No.)

  6767 W. Tropicana Boulevard, Suite 207
           Las Vegas, Nevada                            89103
--------------------------------------------       ----------------
   (Address of principal executive offices)            (Zip Code)


                      2980 S. Rainbow Boulevard, Suite 108
                             Las Vegas, Nevada 89146
                   -------------------------------------------
                 (Former name, former address and former fiscal
                      year, if changed since last report.)

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 such filing
requirements for the past 90 days. Yes [X] No [ ]




<PAGE>   2




State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

         Class                         Outstanding at March 31, 2001 (1)
         -----                         ---------------------------------

    Common Stock, par value                       2,100,000 (1)
    $.001 per share


----------------

     (1) See Part II, Item 5.

Transitional Small Business Disclosure Format: Yes [ ]   No [X]



                                     PART I

                              FINANCIAL INFORMATION

Item I.   Financial Statements


                                  BALANCE SHEET

                                     ASSETS
<TABLE>
<CAPTION>

                                                                           Restated
                                                           3/31/01        Year Ended
                                                         (Unaudited)       12/31/99
                                                         -----------      ----------
         <S>                                             <C>              <C>
         CURRENT ASSETS                                   $       0        $     0
                                                          ---------        -------
            TOTAL CURRENT ASSETS                          $       0        $     0
                                                          ---------        -------
            OTHER ASSETS                                  $       0        $     0
                                                          ---------        -------

             TOTAL OTHER ASSETS                           $       0        $     0
                                                          ---------        -------

             TOTAL ASSETS                                 $       0        $     0
                                                          ---------        -------

</TABLE>



                                      -2-
<PAGE>   3



                                  BALANCE SHEET

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------


<TABLE>
<CAPTION>

                                                                Year Ended                     Restated
                                                                 3/31/01                       Year Ended
                                                               (Unaudited)                      12/31/00
                                                               -----------                     ----------
   <S>                                                         <C>                             <C>
   CURRENT LIABILITIES
      Officers Advances (Note 6)                               $    17,567                     $    16,501
      Interlochen Enterprises                                      100,000                         100,000
      Alschuler Grossman Stein
          & Kahan LLP                                               84,989                          84,989
      Ronald J. Stauber                                              7,500                           7,500
      Savoy Financial Group, Inc.                                    1,303                           1,303
      Interest Payable - Notes                                     157,050                         157,050
                                                               -----------                     -----------

   TOTAL CURRENT LIABILITIES                                   $   368,418                     $   367,343
                                                               -----------                     -----------
   LONG TERM LIABILITIES
      Interlochen Enterprises                                      250,000                         250,000
      Meridian Enterprises                                         250,000                         250,000
      CRS Financial Corp., Ltd.                                  1,000,000                       1,000,000
                                                               -----------                     -----------

   TOTAL LONG TERM LIABILITIES                                 $ 1,500,000                     $ 1,500,000
                                                               -----------                     -----------
   TOTAL LIABILITIES                                           $ 1,868,418                     $ 1,867,343
                                                               ===========                     ===========
   STOCKHOLDERS EQUITY (Note 4)
   Common stock, $.001 par value
   authorized 25,000,000 shares
   issued and outstanding at
   December 31, 2000 - 2,100,000
   shares; December 31, 1999 -
   2,100,000 shares; September
   31, 2000 - 2,100,000 shares                                 $     2,100                     $     2,100

     Additional paid in Capital                                          0                               0
     Accumulated loss                                           (1,870,518)                     (1,869,443)
                                                               -----------                     -----------

TOTAL STOCKHOLDERS EQUITY                                       (1,868,418)                     (1,867,343)
                                                               -----------                     -----------

TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY                                          $         0                     $         0
                                                               -----------                     -----------
</TABLE>



See accompanying notes to financial statements.


                                      -3-
<PAGE>   4


                              STATEMENTS OF INCOME
                                   (RESTATED)

<TABLE>
<CAPTION>

                                                                                                            SEPT. 10, 1996
                                                 THREE MONTHS ENDED                YEARS ENDED              (INCEPTION) TO
                                               MARCH 31,       MARCH 31,     DECEMBER 31,   DECEMBER 31,       MARCH 31,
                                                 2001            2000            2000          1999              2001
                                               ---------       ---------     ------------   ------------       ---------
<S>                                           <C>             <C>            <C>             <C>             <C>
REVENUES                                      $         0     $         0    $         0     $         0     $        0

COST OF REVENUE                                         0               0              0               0              0

          GROSS PROFIT                        $         0     $         0    $         0     $         0     $        0

GENERAL, SELLING AND
    ADMINISTRATIVE EXPENSES                         1,075                        326,689           1,075        327,764
                                              -----------     -----------    -----------     -----------     ----------
          OPERATING (LOSS)                    $    (1,075)    $              $  (326,689)    $    (1,725)    $ (327,764)

NONOPERATING INCOME (EXPENSE)                           0               0              0               0              0

NET (LOSS)                                    $    (1,075)    $              $  (326,689)    $    (1,725)    $ (327,764)
                                              ===========     ===========    ===========     ===========     ==========

NET (LOSS) PER SHARE, BASIC
AND DILUTED (NOTE 2)                          $      (NIL)    $     (0.01)    $   (.1556)    $     (0.00)    $   (0.156)
                                              ===========     ===========     ==========     ===========     ==========
AVERAGE NUMBER OF SHARES
 OF COMMON STOCK
  OUTSTANDING                                   2,100,000       2,100,000      2,100,000       2,100,000      2,100,000
                                               ==========     ===========     ==========     ===========     ==========

</TABLE>


SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.



                                      -4-
<PAGE>   5

                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                  --------------------------------------------
                                   (RESTATED)

<TABLE>
<CAPTION>

                                                                                   Additional
                                          Common              Stock                  paid-in               Accumulated
                                          Shares              Amount                 Capital                 Deficit
                                      ------------          -----------             -----------             -----------
<S>                                    <C>                  <C>                               <C>           <C>
Balance,
March 31, 1997                            21,000            $     2,100             $         0             $    (2,100)

Net loss year ended
December 31, 1997                                                                                                     0
                                     -----------            -----------             -----------             -----------

Balance,
December 31, 1997                         21,000            $     2,100             $         0             $    (2,100)

Net loss year ended
December 31, 1998                                                                                                     0
                                     -----------            -----------             -----------             -----------

Balance,
December 31, 1998                         21,000            $     2,100             $         0             $    (2,100)

March 15, 1999
Changed from no par
value to $.001                                                   (2,079)                  2,079


March 15, 1999
Forward Stock
Split 100:1                            2,079,000                  2,079                  (2,079)

Net loss year
ended December
31, 1999                                                                                                     (1,540,654)
                                     -----------            -----------             -----------             -----------

Balance,
December 31,
1999                                   2,100,000            $     2,100             $         0             $(1,542,754)

Net Loss,
December 31,
2000                                                                                                           (326,689)
                                     -----------            -----------             -----------             -----------

Balance,
December 31,
2000                                   2,100,000            $     2,100                       0             $ 1,869,443
                                     -----------            -----------             -----------             -----------

Net Loss period
ended March 31,
2001                                                                                          0             $    (1,075)
                                     -----------            -----------             -----------             -----------

Balance,
December 31,
2000                                   2,100,000            $     2,100                       0             $ 1,870,518
                                     -----------            -----------             -----------             -----------

</TABLE>

See accompanying notes to financial statements.


                                      -5-
<PAGE>   6



                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                          SEPT. 10, 1996
                                       THREE MONTHS ENDED              YEARS ENDED        (INCEPTION) TO
                                      MARCH 31,    MARCH 31,   DECEMBER 31,   DECEMBER 31,  MARCH 31,
                                        2001         2000         2000            1999        2001
                                      ---------    ---------   ------------   ------------  ---------
<S>                                 <C>           <C>           <C>           <C>           <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
    NET (LOSS)                      $  (1,075)    $      (0)    $(326,689)    $  (1,725)    $(326,689)
    ADJUSTMENTS TO RECONCILE
    NET (LOSS) TO CASH
    (USED IN) OPERATING
    ACTIVITIES:
    CHANGES IN ASSETS
    AND LIABILITIES
    INCREASE IN ACCOUNTS PAYABLE        1,075             0             0             0         1,075

    INCREASE IN OFFICER ADVANCES            0        16,501        16,501        16,501        17,576
                                    ---------     ---------     ---------     ---------     ---------


         NET CASH (USED IN)
            OPERATING ACTIVITIES    $       0     $       0     $       0     $       0     $       0
                                    ---------     ---------     ---------     ---------     ---------

CASH FLOWS FROM
INVESTING ACTIVITIES                $       0     $       0     $       0     $       0     $       0
                                    ---------     ---------     ---------     ---------     ---------

CASH FLOWS FROM
FINANCING ACTIVITIES
    ISSUANCE OF COMMON STOCK                0             0             0             0         2,100

         NET CASH (USED IN)
            FINANCING ACTIVITIES    $       0     $       0     $       0     $       0     $   2,100
                                    ---------     ---------     ---------     ---------     ---------

         NET INCREASE (DECREASE)
            IN CASH                 $       0     $       0     $       0     $       0     $       0

CASH, BEGINNING OF PERIOD ......            0             0             0             0             0


CASH, END OF PERIOD ............    $       0     $       0     $       0     $       0     $       0
                                    =========     =========     =========     =========     =========
</TABLE>

See accompanying notes to financial statements.



                                      -6-
<PAGE>   7

NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY

The Company was organized September 10, 1996, under the laws of the State of
Nevada as Discovery Investments, Inc., Inc. The Company currently has no
operations and in accordance with SFAS #7, is now considered a development
company.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Method

The Company records income and expenses on the accrual method.

Estimates
---------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

Cash and equivalents
--------------------

The Company maintains a cash balance in a non-interest-bearing bank that
currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments with the maturity of
three months or less are considered to be cash equivalents. There are no cash
equivalents as of March 31, 2001.

Income Taxes
------------

Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS #109)
"Accounting for Income Taxes". A deferred tax asset or liability is recorded for
all temporary difference between financial and tax reporting. Deferred tax
expense (benefit) results from the net change during the year of deferred tax
assets and liabilities.

Loss Per Share
--------------

Net loss per share is provided in accordance with Statement of Financial
Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss per
share is computed by dividing losses available to common stockholders by the
weighted average number of common shares outstanding during the period. Diluted
loss per share reflects per share amounts that would have resulted if dilative
common stock equivalents had been converted to common stock. As of December 31,
2000, the Company had no dilative common stock equivalents such as stock
options.



                                      -7-
<PAGE>   8



Year 2000 Disclosure
--------------------

The year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Computer programs that
have time sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000. This could result in a system failure or
miscalculations causing disruption of normal business activities. Since the
Company currently has no operating business and does not use any computers, and
since it has no customers, suppliers or other constituents, there were no
material Year 2000 concerns.

NOTE 3 - INCOME TAXES

There is no provision for income taxes for the period ended December 31, 2000,
due to the net loss and no state income tax in Nevada, the state of the
Company's domicile and operations. The Company's total deferred tax asset as of
December 31, 2000, is as follows:

<TABLE>

       <S>                                             <C>
       Net operation loss carry forward                $ 327,764
       Valuation allowance                             $   2,100
                                                        --------

       Net deferred tax asset                          $ 325,664
                                                       =========
</TABLE>


The federal net operating loss carry forward will expire in 2017.

This carry forward may be limited upon the consummation of a business
combination under IRC Section 381.

NOTE 4 - STOCKHOLDERS' EQUITY

Common Stock
------------

The authorized common stock of Discovery Investments, Inc. consists of
25,000,000 shares with a par value of $0.001 per share.

On September 15, 1996, the Company issued 21,000 shares of its no par value
common stock in consideration of $2,100 in cash.

On March 15, 1999, the Company amended its Articles of Incorporation, which
increased its capitalization from 25,000 common shares to 25,000,000 common
shares. The no par value was changed to $0.001 and the Company forward split its
common stock 100:1, thus increasing the number of outstanding common stock
shares from 21,000 shares to 2,100,000.

Preferred Stock
---------------

Discovery Investments, Inc. has no preferred stock.


                                      -8-
<PAGE>   9


Pledge
------

John Castellucci entered into a Pledge Agreement with M. Mehdi Mostaedi on or
about December 16, 1999, subject to the closing of the Plan and Agreement of
Reorganization on December 20, 1999, wherein John Castellucci collaterally
pledged 2,000,000 shares of his common stock of the Company to M. Mehdi
Mostaedi. A mutual rescission occurred (see Note 9) The pledge holder under the
collateral pledge agreement holds as collateral certain shares of LLO-Gas, Inc.
as collateral, under the collateral pledge agreement.

To the extent that any shares of stock issued to John Castellucci have not been
restored to the Company as part of the mutual rescission, the Company deems said
shares to be treasury shares. Treasury shares do not carry voting rights or
participate in distribution, may not be counted as outstanding shares for any
purpose and may not be counted as assets of the Company for purposes of
computing amounts available for distributions. Upon physical delivery of said
certificates to Pacific Stock Transfer Company, the Company's transfer agent,
said shares will be canceled, retired and restored to the status of authorized
and unissued shares in accordance with law.

NOTE 5 - GOING CONCERN

The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company does not have significant cash or other material
assets, nor does it have an established source of revenues sufficient to cover
its operating costs and to allow it to continue as a going concern. It is the
intent of the Company to seek a business combination with an existing, operating
company. Until that time, the stockholders/off- icers and or directors have
committed to advancing the operating costs of the Company interest free.

NOTE 6 - RELATED PARTY TRANSACTIONS

The Company neither owns nor leases any real or personal property. An officer of
the corporation provides office services without charge. Such costs are
immaterial to the financial statements and accordingly, have not been reflected
therein. The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.


                                      -9-
<PAGE>   10

NOTE 7 - WARRANTS AND OPTIONS

There are no warrants or options outstanding to acquire any additional shares of
common stock.

NOTE 8 - LITIGATION

(a)  On Febrary 29, 2000, West Star Energy Group, Inc. ("West Star") sued John
     Castellucci, the Company and its wholly- owned operating subsidiary,
     LLO-Gas, Inc., in the Superior Court of the State of California, County of
     Los Angeles (Case Number BC 225568). Until August 10, 2000, John
     Castellucci was President, Chief Financial Officer, Secretary, director and
     the principal shareholder of the Company, and President, a director and the
     principal shareholder of West Star. West Star, through its Board of
     Directors (other than John Castellucci), alleges that John Castellucci
     breached his fiduciary duty to West Star and engaged in a series of
     unauthorized transactions for his personal benefit. The plaintiff also
     alleges that John Castellucci made certain fraudulent statements to the
     West Star Board of Directors, which inducted them not to exercise a West
     Star business opportunity to acquire the ARCO Facilities for itself and to
     consent to the acquisition of the ARCO Facilities by LLO-Gas, Inc.

     West Star seeks general and special damages of at least $3.5 million
     against John Castellucci. West Star seeks the imposition of a constructive
     trust on the Company's facilities which were purchased from ARCO (the "ARCO
     Facilities") and an order compelling the Company to return the ARCO
     Facilities, and all proceeds therefrom, to West Star. West Star also seeks
     damages against John Castellucci and the Company of at least $3.5 million
     for unfair competition. In addition, West Star seeks an accounting from the
     defendants. West Star also seeks to recover the costs of the suit,
     prejudgment interest, attorneys' fees and such other relief as the court
     may deem just and proper.

     John Castellucci had informed the Company that it had filed an answer to
     the complaint. The Company believes that it has meritorious defenses and
     affirmative defenses to the lawsuit.

(b)  In December 1999, M. Mehdi Mostaedi loaned LLO-Gas, Inc. $150,000. LLO-Gas,
     Inc. and John Castellucci jointly executed a promissory note dated December
     16, 1999 (the "Mostaedi Note") in the principal amount of $150,000. The
     Mostaedi Note bears interest at the rate of 9% per annum and was due and
     payable as to principal and interest on February 16, 2000. The Mostaedi
     Note was secured with a pledge of


                                      -10-
<PAGE>   11


     common stock owned by John Castellucci pursuant to a Pledge Agreement dated
     December 20, 1999 between John Castellucci and M. Mehdi Mostaedi.

     On April 11, 2000, M. Mehdi Mostaedi filed a lawsuit against the Company
     and John Castellucci in the Superior Court of the State of California, West
     District, Santa Monica, California (Case Number SC 016250), alleging breach
     of contract and default under the Mostaedi Note. M. Mehdi Mostaedi seeks
     damages in the amount of $150,000, interest on that amount at the rate of
     9% from December 16, 1999, and costs of the suit. The Company has been
     served with the complaint but has not filed an answer to the complaint. On
     or about August 17, 2000, M. Mehdi Mostaedi filed a request to enter the
     default against the Company (and John Castellucci). The Company believes
     that said filing of the request to enter the default may constitute a
     violation of the automatic stay provisions under the Bankruptcy Act since
     the complaint alleges that the Company is the successor to LLO-Gas, Inc.
     The Company believes that it may have meritorious defenses and affirmative
     defenses to the lawsuit in that it was not a party to the Mostaedi Note.

(c)  On October 17, 2000, Yuri Zaloznyy ("Zaloznyy") sued John Castellucci, the
     Company, LLO-Gas, Inc., and others, in an adversary proceeding in the
     United States Bankruptcy Court, Central District of California, San
     Fernando Valley Division.

     Zaloznyy seeks general and special damages from all defendants for breach
     of contract, fraud, breach of fiduciary duty, conversion, constructive
     trust, fraudulent or void conveyance, specific performance, dissolution of
     certain of the defendants, and damages. The Company has filed an answer to
     the complaint, severing itself from all other defendants to include John
     Castellucci and LLO-Gas, Inc. The Company believes that it has meritorious
     defenses and affirmative defenses to the lawsuit.

(d)  On September 1, 2000, the Company filed a lawsuit against John Castellucci
     and Does 1 through 5, inclusive, in the Superior Court of the State of
     California, West District, Santa Monica, California (Case Number SC062993).
     The complaint was for cancellation of shares and of any share certificates
     issued to John Castellucci. On August 10, 2000, the Company and John
     Castellucci had entered into a Mutual Rescission Agreement and Mutual
     Release. Pursuant to said Mutual Rescission Agreement and Mutual Release,
     John Castellucci, the record holder of 9,900,000 shares of stock of the
     Company, evidenced by certificate number 160, was to surrender for
     cancellation said shares. See Item 5 of the


                                      -11-
<PAGE>   12


     Form 10-QSB filed with the Securities and Exchange Commission on August 21,
     2000 (incorporated herein by reference).

     The California Superior Court, on October 25, 2000, ordered that John
     Castellucci shall surrender for cancellation certificate number 160 to the
     Company or to the Company's transfer agent for cancellation and that said
     shares are to be restored to authorized but unissued status. It was further
     ordered that if Castellucci did not surrender for cancellation said
     certificate number 160 or cause said certificate to be surrendered, the
     Company may forthwith issue instructions to its transfer agent that said
     shares of stock are no longer to been deemed issued and outstanding, that
     said shares are to be restored to authorized but unissued status, and that
     the number of issued and outstanding shares of stock of the Company
     appearing on the Company's stockholder records are to be reduced by said
     9,900,000 shares. Further, the California Superior Court determined that
     John Castellucci be deemed to not to have any right, title and interest in
     the 9,900,000 shares evidenced by certificate number 160. A copy of the
     order of the California Superior Court was delivered to the Company's
     transfer agent and said shares have been cancelled. (See Note 4 above.)

(e)  At all times relevant, there have been no reports by any officer or
     director of the Company or any person who directly or indirectly is the
     beneficial owner of more than 10% of any class of equity securities of the
     Company registered under the Securities Act of 1934, as amended, filed with
     the Securities and Exchange Commission. Further, since the reporting
     provisions of 16(a) of the Securities Exchange Act of 1934, as amended, are
     designed to ensure the prompt disclosure of holdings, there are no
     provisions allowing the late filing of an ownership report and there is no
     extension of time for the filing of an ownership report. The California
     Superior Court was informed that there have been no reports filed with the
     Securities and Exchange Commission as it relates to the shares issued to
     John Castellucci and the shares held by a pledge holder as it relates to M.
     Mehdi Mostaedi or by M. Mehdi Mostaedi.

NOTE 9 - MUTUAL RESCISSION AGREEMENT AND MUTUAL RELEASE

On December 10, 1999, the Company entered into a Plan and Agreement of
Reorganization with LLO-Gas, Inc. and John Castellucci. On December 20, 1999,
there was a closing under the Plan and Agreement of Reorganization and LLO-Gas,
Inc. became a wholly owned subsidiary of the Company and there was a change of
control of the Company. Between December 20, 1999 and August 11,


                                      -12-
<PAGE>   13



2000, differences of opinion as to matters of fact and as to matters of law have
arisen by and between certain of the shareholders of the Company, who were
shareholders prior to the closing, and between the Company, John Castellucci and
LLO-Gas, Inc. In addition, on June 7, 2000, LLO-Gas, Inc. filed a Voluntary
Petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court, Central District of California, San Fernando Valley Division, case number
SV 00-15398-AG. Said Chapter 11 Bankruptcy is currently pending and effects
LLO-Gas, Inc. Predicated upon the differences of matters of fact and matter of
law, the parties entered into a Mutual Rescission Agreement and Mutual Release.

The Mutual Rescission Agreement and Mutual Release provides, inter alia, that
the Company consents and agrees to rescind that certain Plan and Agreement of
Reorganization with John Castellucci consenting and agreeing to the rescission.
The parties mutually agreed, pursuant to said Mutual Rescission Agreement and
Mutual Release to forgo all rights and benefits provided to each other under the
Plan and Agreement of Reorganization, as consideration for the rescission, ab
initio, of the closing described therein.


Item II. Management's Discussion and Analysis or Plan of Operation

Results of Operation.

     Certain statements contained in this Quarterly Report on Form 10-QSB that
are not related to historical results, including, without limitation, statements
regarding the Company's business strategy and objectives, future financial
operations, are forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and involve risks and uncertainties. Although
the Company believes that the assumptions will prove to be accurate, actual
results could differ materially from those discussed in the forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, competition from other similar businesses, and market
and general economic factors. All forward-looking statements contained in this
Quarterly Report on Form 10-QSB are qualified in their entirety by this
statement.

     Until October 26, 1999, Discovery Investments, Inc. (the "Company") had no
operations, assets or financial resources. During the period from inception
(September 10, 1996) until October 26, 1999, the Company sustained operation
expenses without corresponding revenues. This resulted in the Company's
incurring a net operating loss.



                                      -13-
<PAGE>   14


     On December 10, 1999, the Company entered into a Plan and Agreement of
Reorganization with LLO-Gas, Inc. and John Castellucci. On December 20, 1999,
there was a closing under the Plan and Agreement of Reorganization and LLO-Gas,
Inc. became a wholly owned subsidiary of the Company and there was a change of
control of the Company. Between December 20, 1999 and August 11, 2000,
differences of opinion as to matters of fact and as to matters of law had arisen
by and between certain of the shareholders of the Company, who were shareholders
prior to the closing, and between the Company, John Castellucci and LLO-Gas,
Inc.

     On June 7, 2000, LLO-Gas, Inc. filed a Voluntary Petition under Chapter 11
of the Bankruptcy Code in the United States Bankruptcy Court, Central District
of California, San Fernando Valley Division, case number SV 00-15398-AG. Said
Chapter 11 Bankruptcy is currently pending and effects LLO-Gas, Inc. and not the
Company. Predicated upon the differences of matters of fact and matters of law,
the parties entered into a Mutual Rescission Agreement and Mutual Release (See
Form 10-QSB filed with the Securities and Exchange Commission on August 21, 2000
(incorporated herein by reference)).

     The Mutual Rescission Agreement and Mutual Release provided, inter alia,
that the Company consents and agrees to rescind that certain Plan and Agreement
of Reorganization with John Castellucci consenting and agreeing to the
rescission. The parties mutually agreed, pursuant to said Mutual Rescission
Agreement and Mutual Release to forgo all rights and benefits provided to each
other under the Plan and Agreement of Reorganization, as consideration for the
rescission, ab initio, of the closing described therein.

     Giving effect to the recission of the Plan and Agreement of Reorganization,
the Company has no revenues or earnings from operations, with no significant
assets or financial resources. Accordingly, the Company will in all likelihood
sustain operating expenses without corresponding revenues, at least until the
consummation of a new business combination. This resulted in the Company
incurring a net operating loss which will increase continuously until the
Company can consummate a business combination with a profitable business
opportunity and consummate such a business combination.

     The Company is now dependent upon its officers to meet any de minimis costs
which may occur. Kimberly Lynn Jack, an officer and director of the Company, has
agreed to provide the necessary funds, without interest, for the Company to
comply with the Securities Exchange Act of 1934, as amended, provided that she
is an officer and director of the Company when the obligation is incurred. All
advances are interest-free.


                                      -14-
<PAGE>   15


                                     PART II

                                OTHER INFORMATION

Item 1 - Legal Proceedings

     (a) On Febrary 29, 2000, West Star Energy Group, Inc. ("West Star") sued
John Castellucci, the Company and its wholly- owned operating subsidiary,
LLO-Gas, Inc., in the Superior Court of the State of California, County of Los
Angeles (Case Number BC 225568). Until August 10, 2000, John Castellucci was
President, Chief Financial Officer, Secretary, director and the principal
shareholder of the Company, and President, a director and the principal
shareholder of West Star. West Star, through its Board of Directors (other than
John Castellucci), alleges that John Castellucci breached his fiduciary duty to
West Star and engaged in a series of unauthorized transactions for his personal
benefit. The plaintiff also alleges that John Castellucci made certain
fraudulent statements to the West Star Board of Directors, which inducted them
not to exercise a West Star business opportunity to acquire the ARCO Facilities
for itself and to consent to the acquisition of the ARCO Facilities by LLO- Gas,
Inc.

     West Star seeks general and special damages of at least $3.5 million
against John Castellucci. West Star seeks the imposition of a constructive trust
on the Company's facilities which were purchased from ARCO (the "ARCO
Facilities") and an order compelling the Company to return the ARCO Facilities,
and all proceeds therefrom, to West Star. West Star also seeks damages against
John Castellucci and the Company of at least $3.5 million for unfair
competition. In addition, West Star seeks an accounting from the defendants.
West Star also seeks to recover the costs of the suit, prejudgment interest,
attorneys' fees and such other relief as the court may deem just and proper.

     John Castellucci and the Company have filed an answer to the complaint. The
Company believes that it has meritorious defenses and affirmative defenses to
the lawsuit.

     In view of the inherent uncertainties of litigation, the outcome of the
litigation itself, cannot be predicted.

     (b) In December 1999, M. Mehdi Mostaedi loaned LLO- Gas, Inc. $150,000.
LLO-Gas, Inc. and John Castellucci jointly executed a promissory note dated
December 16, 1999 (the "Mostaedi Note") in the principal amount of $150,000. The
Mostaedi Note bears interest at the rate of 9% per annum and was due and payable
as to principal and interest on February 16, 2000. The Mostaedi Note is secured
with a pledge of 2,000,000 shares of the Company's common stock owned by John
Castellucci pursuant to a


                                      -15-
<PAGE>   16


Pledge Agreement dated December 20, 1999 between John Castellucci
and M. Mehdi Mostaedi.

     On April 11, 2000, M. Mehdi Mostaedi filed a lawsuit against the Company
and John Castellucci in the Superior Court of the State of California, West
District, Santa Monica, California (Case Number SC 016250), alleging breach of
contract and default under the Mostaedi Note. M. Mehdi Mostaedi seeks damages in
the amount of $150,000, interest on that amount at the rate of 9% from December
16, 1999, and costs of the suit. The Company has been served with the complaint
but has not filed an answer to the complaint. On or about August 17, 2000, M.
Mehdi Mostaedi filed a request to enter the default against the Company (and
John Castellucci). The Company believes that said filing of the request to enter
the default may constitute a violation of the automatic stay provisions under
the Bankruptcy Act since the complaint alleges that the Company is the successor
to LLO-Gas, Inc. The Company believes that it may have meritorious defenses and
affirmative defenses to the lawsuit in that it was not a party to the Mostaedi
Note.

     (c) On October 17, 2000, Yuri Zaloznyy ("Zaloznyy") sued John Castellucci,
the Company, LLO-Gas, Inc., and others, in an adversary proceeding in the United
States Bankruptcy Court, Central District of California, San Fernando Valley
Division.

     Zaloznyy seeks general and special damages from all defendants for breach
of contract, fraud, breach of fiduciary duty, conversion, constructive trust,
fraudulent or void conveyance, specific performance, dissolution of certain of
the defendants, and damages. The Company has filed an answer to the complaint,
severing itself from all other defendants to include John Castellucci and
LLO-Gas, Inc. The Company believes that it has meritorious defenses and
affirmative defenses to the lawsuit.

     In view of the inherent uncertainties of litigation, the outcome of the
litigation itself, cannot be predicted.

     (d) On September 1, 2000, the Company filed a lawsuit against John
Castellucci and Does 1 through 5, inclusive, in the Superior Court of the State
of California, West District, Santa Monica, California (Case Number SC062993).
The complaint was for cancellation of shares and of any share certificates
issued to John Castellucci. On August 10, 2000, the Company and John Castellucci
had entered into a Mutual Rescission Agreement and Mutual Release. Pursuant to
said Mutual Rescission Agreement and Mutual Release, John Castellucci, the
record holder of 9,900,000 shares of stock of the Company, evidenced by
certificate number 160, was to surrender for cancellation said shares. See Item
5 of the Form 10-QSB filed with the Securities and Exchange Commission on August
21, 2000 (incorporated herein by reference).



                                      -16-
<PAGE>   17


     At all times relevant, there have been no reports by any officer or
director of the Company or any person who directly or indirectly is the
beneficial owner of more than 10% of any class of equity securities of the
Company registered under the Securities Act of 1934, as amended, filed with the
Securities and Exchange Commission. Further, since the reporting provisions of
16(a) of the Securities Exchange Act of 1934, as amended, are designed to ensure
the prompt disclosure of holdings, there are no provisions allowing the late
filing of an ownership report and there is no extension of time for the filing
of an ownership report. The California Superior Court was informed that there
have been no reports filed with the Securities and Exchange Commission as it
relates to certificate number 160.

     The California Superior Court, on October 25, 2000, ordered that John
Castellucci shall surrender for cancellation certificate number 160 to the
Company or to the Company's transfer agent for cancellation and that said shares
are to be restored to authorized but unissued status. It was further ordered
that if Castellucci did not surrender for cancellation said certificate number
160 or cause said certificate to be surrendered, the Company may forthwith issue
instructions to its transfer agent that said shares of stock are no longer to
been deemed issued and outstanding, that said shares are to be restored to
authorized but unissued status, and that the number of issued and outstanding
shares of stock of the Company appearing on the Company's stockholder records
are to be reduced by said 9,900,000 shares. Further, the California Superior
Court determined that John Castellucci be deemed to not to have any right, title
and interest in the 9,900,000 shares evidenced by certificate number 160. A copy
of the order of the California Superior Court was delivered to the Company's
transfer agent and said shares have been cancelled.

Item 2 -  Changes in the Rights of the Company's
          Security Holders ..........................................None

Item 3 -  Defaults by the Company on its
          Senior Securities .........................................None

Item 4 -  Submission of Matter to Vote of Security
          Holders ...................................................None

Item 5 -  Other Information

     (a) The following table lists, as of March 31, 2001 and giving effect to
the Mutual Rescission Agreement and Mutual Release and court order of October
25, 2000, the security ownership of (i) all persons known by the Company to own
beneficially 5% or more of Common Stock; (ii) all executive officers; and (iii)
each director of the Company.


                                      -17-
<PAGE>   18

<TABLE>
<CAPTION>


                                    Name and                           Amount and
                                    Address of                         Nature of
Title of Class                      Beneficial                         Beneficial        Percent
                                    Owner                              Owner             of Class
-------------------------------------------------------------------------------------------------

<S>                        <C>                                         <C>               <C>
Common                     Kimberly Lynn Jack                          550,000            26.2%
                           1916 East 50th Street
                           Wichita, Kansas 67216

Common                     Scott A. Jack                               550,000            26.2%
                           1916 East 50th South
                           Wichita, Kansas 67216

Common                     Debra S. Hackney                            340,000            16.2%
                           5262 S. Madison
                           Wichita, Kansas 67216

Common                     John Castellucci                                 (1)              -
                           23805 Stewart Ranch Rd, #265
                           Malibu, California 90265

Common                     All Officers and                          1,440,000            68.6%
                           Directors as a Group
                           (three [3] individuals)
</TABLE>

----------------

(1)  John Castellucci entered into a Pledge Agreement with M. Mehdi Mostaedi on
     or about December 16, 1999, subject to the closing of the Plan and
     Agreement of Reorganization on December 20, 1999. The pledge holder under
     the collateral pledge agreement holds as collateral certain shares of LLO-
     Gas, Inc. as additional collateral, under the collateral pledge agreement.

     (b) Although no receiver, fiscal agent or other officer has been appointed
for the Company in a proceeding under the Bankruptcy Act or in any other
proceeding under state or federal law in which a court or governmental entity
has assumed jurisdiction over substantially all of the assets or business of the
Company and no jurisdiction has been assumed by leaving the existing directors
and officers in possession but subject to the supervision and orders of a court
or governmental body, the Company presently is considering filing a proceeding
under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court.
Said bankruptcy proceeding may be required predicated upon the Company's present
lack of operations, assets or financial resources to defend against those
creditors claiming potential obligations or contingent obligations from the
Company, in connection with the period of time that LLO-Gas, Inc. was a
wholly-owned operating subsidiary of the Company.



                                      -18-
<PAGE>   19


     (c) The board held three meetings during the current quarter, which were
special meetings by written consent.

     (d) The board of directors has not established any audit committee. In
addition, the Company does not have any other compensation or executive or
similar committees. The Company will not, in all likelihood, establish any audit
committee until such time as the Company completes a business combination, of
which there can be no assurance. The Company recognizes that an audit committee,
when established, will play a critical role in the financial reporting system of
the Company by overseeing and monitoring management's and the independent
auditors' participation in the financial reporting process. At such time as the
Company establishes an audit committee, its additional disclosures with the
Company's auditors and management may promote investor confidence in the
integrity of the financial reporting process.

     Until such time as an audit committee has been established, the full board
of directors will undertake those tasks normally associated with an audit
committee to include, but not by way of limitation, the (i) review and
discussion of the audited financial statements with management, (ii) discussions
with the independent auditors the matters required to be discussed by the
Statement On Auditing Standards No. 61, as may be modified or supplemented, and
(iii) received from the auditors disclosures regarding the auditors'
Independents Standards Board Standard No. 1, as may be modified or supplemented.

Item 6 - Exhibits and Reports on Form 8-K

     (a) No reports on Form 8-K were filed during the quarter for which the
report is filed.




                                    SIGNATURE

     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.


Dated: May 14, 2001                     DISCOVERY INVESTMENTS, INC.
                                        (Company)


                                        By: /s/ Kimberly Lynn Jack
                                           ----------------------------
                                            Kimberly Lynn Jack
                                            President


                                      -19-