UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                               FORM 10-QSB
              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         For the Quarterly Period Ended

                                  July 31, 2001

                         Commission File Number: 0-26439


                             Kidstoysplus.com, Inc.
             (Exact name of registrant as specified in its charter)


              Nevada                                     98-0203927
           -------------                            ----------------------
      (Place of Incorporation)                     (IRS Employer ID Number)


           2924 Ciffe Ave Courtenay, British Columbia, Canada V9N 2L7
          ------------------------------------------------------------
             (Address of registrant's principal executive office)

                                 1-877-566-1212
                         (Registrant's telephone number)


Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Section 13 of 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 ___


     Number of Shares of Common Stock,  $0.001 Par Value,  Outstanding  at April
30, 2001:                        12,330,884
                                -----------



<PAGE>


                             KIDSTOYSPLUS.COM, INC.
                              For the Quarter Ended
                                  July 31, 2001
                              INDEX TO FORM 10-QSB

<TABLE>
<S>                                                                                 <C>

                                                                                    Page

PART I - FINANCIAL INFORMATION .......................................................1

ITEM 1. FINANCIAL STATEMENTS: ........................................................1

         Balance Sheets:
         - January 31, 2001 and July 31, 2001.........................................1

         Statements of Operations:
         - For the Three and Six Months Ended July 31, 2001...........................2

         Statements of Cash Flow:
         - For the Three and Six Months Ended July 31, 2001...........................3

         Notes to Financial Statements ...............................................4

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS..........................................7

PART II - OTHER INFORMATION .........................................................12

ITEM 1.  LEGAL PROCEEDINGS ..........................................................12

ITEM 2.  CHANGES IN SECURITIES ......................................................13

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES ............................................13

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS ..........................13

ITEM 5.  OTHER INFORMATION ..........................................................13

ITEM 6.  EXHIBITS AND REPORTS ON FROM 8-K ...........................................13

SIGNATURES ..........................................................................14
</TABLE>


<PAGE>

PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS:


KIDSTOYSPLUS.COM, INC.
BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited)


<TABLE>
=================================================================================================
                                                                        July 31,     January 31,
                                                                            2001            2001
--------------------------------------------------------------------------------- ---------------
<S>                                                                <C>            <C>
ASSETS
Current
    Cash                                                           $           -  $       24,451
    Receivables                                                            4,503          13,572
    Inventory                                                             89,519          72,489
    Prepaid expenses and deposits                                          7,062           3,953
                                                                   -------------  --------------
    Total current assets                                                 101,084         114,465

Due from related parties (Note 3)                                         48,365          47,850

Capital assets                                                            24,124          23,044
                                                                   -------------  --------------
Total assets                                                       $     173,573  $      185,359
=================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current
    Bank indebtedness                                              $         222  $            -
    Accounts payable and accrued liabilities                              59,866          27,218
                                                                   -------------  --------------
    Total current liabilities                                             60,088          27,218
                                                                   -------------  --------------
Stockholders' equity
    Common stock (Note 4)
       Authorized
         25,000,000 common shares with a par value of $0.001
       Issued and outstanding
         12,330,884 common shares (January 31, 2001 -
         11,130,884 common shares)                                        12,330          11,130
    Additional paid-in capital                                         1,027,712         968,912
    Deficit                                                             (104,656)              -
    Deficit accumulated during the development stage                    (821,901)       (821,901)
                                                                   -------------  --------------
    Total stockholders' equity                                           113,485         158,141
                                                                   -------------  --------------
Total liabilities and stockholders' equity                         $     173,573  $      185,359
=================================================================================================
</TABLE>

              The accompanying notes are an integral part of these
                             financial statements.



                                       1
<PAGE>

KIDSTOYSPLUS.COM, INC.
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited)



<TABLE>

==================================================================================================================

                                                   Three Month      Three Month        Six Month        Six Month
                                                  Period Ended     Period Ended     Period Ended     Period Ended
                                                      July 31,         July 31,         July 31,         July 31,
                                                          2001             2000             2001             2000
--------------------------------------------------------------- ---------------- ---------------- ----------------
<S>                                              <C>              <C>               <C>               <C>
SALES                                            $      46,466    $       1,709     $     87,395      $     1,709

COST OF SALES                                           34,069                -           57,435                -
                                                 --------------   --------------   --------------    ------------
GROSS MARGIN                                            12,397            1,709           29,960            1,709
                                                 --------------   --------------   --------------    ------------
EXPENSES
    Consulting fees and sub-contracts                   19,291           57,404           47,025          127,343
    Depreciation                                         2,358            2,245            4,604            3,433
    Entertainment and promotion                            912            2,102            1,184            6,140
    Equipment rental                                       230              503              446            1,027
    Investor relations                                       -           16,237            4,455           24,987
    Legal and accounting                                 6,191           19,787           11,078           24,091
    Marketing and advertising                            1,777            3,506            7,130            4,636
    Office and administration                           16,236           34,563           21,451           48,441
    Rent                                                 7,555            5,602           11,602           11,643
    Salaries and wages                                   7,516                -           12,486                -
    Telephone and utilities                              2,672            6,578            6,537           10,614
    Transfer agent and filing fees                           7              934              831            1,372
    Travel and automobile                                1,302            4,263            2,151           11,918
    Website design and maintenance                       2,107            1,907            4,066            1,907
                                                 --------------   --------------   --------------    ------------
                                                        68,154          155,631          135,046          277,552
                                                 --------------   --------------   --------------    ------------
Loss before other item                                 (55,757)        (153,922)        (105,086)        (275,843)

OTHER ITEM
    Interest income                                        121            5,077              430            7,184
                                                 --------------   --------------   --------------    ------------
Loss for the period                            $       (55,636)  $     (148,845)    $   (104,656)     $  (268,659)
==================================================================================================================
Basic and diluted loss per share               $         (0.01)  $        (0.01)    $      (0.01)     $     (0.03)
==================================================================================================================
Weighted average number of shares of common
stock outstanding                                   11,641,754       10,558,484       11,390,553       10,376,822
==================================================================================================================
</TABLE>

              The accompanying notes are an integral part of these
                             financial statements.



                                       2
<PAGE>

KIDSTOYSPLUS.COM, INC.
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited)


<TABLE>
==============================================================================================================================

                                                               Three Month      Three Month        Six Month        Six Month
                                                              Period Ended     Period Ended     Period Ended     Period Ended
                                                                  July 31,         July 31,         July 31,         July 31,
                                                                      2001             2000             2001             2000
------------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>               <C>              <C>               <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
    Loss for the period                                       $    (55,636)     $  (148,845)     $  (104,656)      $ (268,659)
    Items not affecting cash:
       Depreciation                                                  2,358            2,245            4,604            3,433

    Changes in other operating assets and liabilities:
       (Increase) decrease in receivables                            1,194           (5,138)           9,069           (9,622)
       Increase in inventory                                        (7,748)         (33,617)         (17,030)         (40,051)
       Increase in prepaid expenses and deposits                      (195)            (339)          (3,109)            (485)
       Increase (decrease) in accounts payable and
       accrued liabilities                                           3,386           (8,234)          32,648          (51,248)
                                                              -------------     -------------    ------------      -----------
    Net cash used in operating activities                          (56,641)        (193,928)         (78,474)        (366,632)
                                                              -------------     -------------    ------------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES
    Capital assets acquired                                         (3,436)          (1,868)          (5,684)         (20,646)
    Due from related parties                                          (283)         (46,073)            (515)         (46,073)
                                                              -------------     -------------    ------------      -----------
    Net cash used in investing activities                           (3,719)         (47,941)          (6,199)         (66,719)
                                                              -------------     -------------    ------------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES
    Common stock issued for cash                                    60,000                -           60,000          738,000
    Share issuance costs                                                 -                -                -          (73,800)
    Stock subscriptions received                                         -                -                -            5,500
                                                              -------------     -------------    ------------      -----------
    Net cash provided by financing activities                       60,000                -           60,000          669,700
                                                              -------------     -------------    ------------      -----------
Change in cash during the period                                      (360)        (241,869)         (24,673)         236,349

Cash, beginning of period                                              138          489,590           24,451           11,372
                                                              -------------     -------------    ------------      -----------
Cash (bank indebtedness), end of period                       $       (222)     $   247,721      $      (222)      $  247,721
==============================================================================================================================
Cash paid during the period for interest                      $          -      $         -      $         -       $        -
==============================================================================================================================
Cash paid during the period for income taxes                  $          -      $         -      $         -       $        -
==============================================================================================================================
</TABLE>

              The accompanying notes are an integral part of these
                             financial statements.


                                       3
<PAGE>

KIDSTOYSPLUS.COM, INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JULY 31, 2001
================================================================================


1.   HISTORY AND ORGANIZATION OF THE COMPANY

     The  Company  was  incorporated  on  February 4, 1999 under the laws of the
     state of Nevada.  The Company was considered in the development stage until
     January 2001 at which time it ceased being a development stage company. The
     Company  operates  a  retail  website  on  the  internet   specializing  in
     children's toys and entertainment products.

     In the opinion of management, the accompanying financial statements contain
     all adjustments necessary (consisting only of normal recurring accruals) to
     present  fairly  the  financial   information   contained  therein.   These
     statements do not include all  disclosures  required by generally  accepted
     accounting  principles and should be read in  conjunction  with the audited
     financial  statements  of the Company for the year ended  January 31, 2001.
     The results of operations  for the six month period ended July 31, 2001 are
     not  necessarily  indicative  of the  results to be  expected  for the year
     ending January 31, 2002.


2.   GOING CONCERN

     The  Company's  financial  statements  are  prepared  using  the  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.  Without  realization of additional capital,
     it would be unlikely for the Company to continue as a going concern.  It is
     management's plan to seek additional capital through equity financings.

<TABLE>
     ===============================================================================================
                                                                           July 31,     January 31,
                                                                               2001            2001
     -----------------------------------------------------------------------------------------------
    <S>                                                                 <C>             <C>
     Deficit                                                            $  (104,656)    $        -
     Deficit accumulated during the development stage                      (821,901)      (821,901)
     Working capital                                                         40,996         87,247
     ===============================================================================================
</TABLE>


3.   DUE FROM RELATED PARTIES

<TABLE>
     =================================================================================================================
                                                                                             July 31,     January 31,
                                                                                                 2001            2001
     -----------------------------------------------------------------------------------------------------------------
    <S>                                                                                    <C>             <C>
     Due from directors of the Company, unsecured, non-interest bearing with no fixed
          terms of repayment                                                               $   48,365      $   47,850
     =================================================================================================================

</TABLE>



                                       4
<PAGE>

KIDSTOYSPLUS.COM, INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JULY 31, 2001
================================================================================


4.   COMMON STOCK

     On June 1, 2001,  June 21, 2001 and July 13,  2001,  the Company  completed
     three private  placements  whereby it issued  500,000,  200,000 and 500,000
     units under Rule 506 of Regulation D of the Securities Act of 1933 at $0.05
     per unit for total proceeds of $25,000, $10,000 and $25,000,  respectively.
     Each unit  entitles  the holder to one share of common  stock and one share
     purchase warrant.  Each whole share purchase warrant entitles the holder to
     purchase one additional share of common stock at a price of $0.06 per share
     for a period of one year from the date of the private placement.


5.   STOCK-BASED COMPENSATION

     During the current  period,  the Company  granted  options to officers  and
     employees to acquire up to 300,000 shares of common stock of the Company at
     an exercise price of $0.085 per share expiring June 1, 2011.

     Following is a summary of the stock option activity during the period:

<TABLE>
     =====================================================================================================
                                                                                                 Weighted
                                                                                                  Average
                                                                                   Number        Exercise
                                                                                of Shares           Price
     -----------------------------------------------------------------------------------------------------
    <S>                                                                        <C>            <C>
     Outstanding, January 31, 2000                                              2,000,000      $    0.17
         Granted                                                                  895,000           0.62
         Exercised                                                               (422,400)          0.11
         Cancelled                                                               (477,600)          0.22
                                                                              -----------
     Outstanding, January 31, 2001                                              1,995,000           0.38
         Granted                                                                  300,000           0.085
                                                                              -----------
     Outstanding, July 31, 2001                                                 2,295,000      $    0.33
     =====================================================================================================
     Weighted average fair value of options granted during the current period                  $    0.080
     =====================================================================================================
</TABLE>

     Compensation

     The Company granted  300,000  options to officers and employees  during the
     current period. These options are accounted for using Accounting Principles
     Board Opinion No. 25,  "Accounting  for Stock Issued to  Employees",  which
     follows the intrinsic  value based method for accounting  for  compensation
     resulting from the granting of options.  Had compensation  expense relating
     to the 300,000 options granted to officers and employees been recognized on
     the basis of fair value  pursuant  to  Statement  of  Financial  Accounting
     Standard No. 123,  net loss and loss per share would have been  adjusted as
     follows:



                                       5
<PAGE>

KIDSTOYSPLUS.COM, INC.
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
JULY 31, 2001
================================================================================


5.   STOCK-BASED COMPENSATION (cont'd...)

     Compensation (cont'd...)

    ==========================================================================
                                                   Six month        Six month
                                                Period Ended     Period Ended
                                                    July 31,         July 31,
                                                        2001             2000
    --------------------------------------------- ---------------- -----------
     Loss for the period
       As reported                              $   (104,656)     $  (268,659)
                                                =============     ============
       Pro forma                                $   (108,646)     $  (293,423)
                                                =============     ============
     Basic and diluted loss per share
       As reported                              $      (0.01)     $     (0.03)
                                                =============     ============
       Pro forma                                $      (0.01)     $     (0.03)
    ==========================================================================


     The fair value of each option  granted is estimated on the grant date using
     the Black Scholes Option Pricing Model. The assumptions used in calculating
     fair values are as follows:

     ======================================================================
                                                        2001        2000
     ----------------------------------------------------------------------
     Risk-free interest rate                             5.00%      6.58%
     Expected life of options                         3 years     3 years
     Expected volatility                               212.29%      0.864%
     Expected dividend yield                             0.0%       0.0%
     ======================================================================


6.   RELATED PARTY TRANSACTIONS

     During the six month period ended July 31, 2001,  the Company  entered into
     the following transactions with related parties:

     a)   Paid  consulting  fees of $27,850 (2000 - $39,000) to the president of
          the Company.

     b)   Paid office  administration fees of $4,594 (2000 - $Nil) to a relative
          of an officer of the Company.

     These  transactions  were in the  normal  course  of  operations  and  were
     measured  at  the   exchange   value  which   represented   the  amount  of
     consideration established and agreed to by the related parties.






                                       6
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

Except  for  disclosures  that  report the  Company's  historical  results,  the
statements set forth in this section contain forward-looking  statements.  Words
or phrases  "will likely  result",  "are  expected  to",  "will  continue",  "is
anticipated",  "estimate",  "project or projected",  or similar  expressions are
intended  to  identify  "forward-looking  statements"  within the meaning of the
Private Securities Litigation Reform Act of 1995 (the Reform Act).

Actual results could differ  materially form those projected in  forward-looking
statements.  Additional  information and factors that could cause actual results
to differ materially from those in the forward-looking  statements are set forth
in this Form 10-QSB, and in the section entitled "Risk Factors" in the Company's
Annual  Report  on  Form  10-KSB  on  file  with  the  Securities  and  Exchange
Commission.  The Company desires to take advantage of certain  provisions in the
Private  Securities  Litigation  Reform Act of 1995, which provide a safe harbor
for forward-looking  statements made by or on behalf of the Company. The Company
hereby cautions  stockholders,  prospective  investors in the Company, and other
readers to not place undue reliance on these forward-looking  statements,  which
can only address known events as of the date of this report.

General Overview

Kidstoysplus.com,  Inc. was  organized  and  incorporated  under the laws of the
State of Nevada on February 4, 1999.  Kidstoysplus.com,  Inc.'s principal office
is located at 2924 Cliffe Avenue,  Courtenay,  British Columbia, Canada V9N 2L7.
Kidstoysplus.com,  Inc.  maintains an administrative  office at Suite 1000 - 355
Burrard Street, Vancouver,  British Columbia, Canada V6C 2G8.  Kidstoysplus.com,
Inc.'s URL is www.kidstoysplus.com.

Kidstoysplus.com,  Inc. was organized to develop and operate a retail website on
the Internet  specializing in children's  products.  We had an operating website
and two retail  locations in British  Columbia  during our second  quarter ended
July 31, 2001. We currently  offer  children's  toys,  collectable toy items and
hobby related  products.  In the future, we may offer books,  music,  story line
CD's, audio-tapes, movies, video games and educational products.

The following discussion and analysis explains our results of operations for the
three-month  fiscal  quarter and  six-month  period  ended July 31, 2001 and our
financial condition.  You should review our discussion and analysis of financial
condition in conjunction with our financial statements and the related notes, as
well as statements detailed in the Company's  Securities and Exchange Commission
filings.

Results of Operations

     Fiscal Period Ended July 31, 2001

Revenues.  We had an  operational  website and two retail  locations  in British
Columbia during the six-month period ended July 31, 2001. Our first  operational
quarter was our fourth  quarter  ended  January  31,  2001,  the 2000  Christmas
holiday  season.  Our sales  continued to grow after the holiday  season  rising
through  the first  quarter,  (February,  March and  April)  and into the second
quarter of May,  June and July. We do not believe that the  comparative  revenue
figures  (fiscal 2000 to fiscal 2001) will be indicative  of our future  growth,
since our first operational  quarter was the fourth fiscal quarter ended January
31, 2001.  We had revenues of $46,466  during the second  quarter ended July 31,
2001,  compared  to revenues  of $1,709  during the same period in 2000.  We had
revenues of $87,395 during the six-month period ended July 31, 2001, compared to
$1,709  during the same period in 2000. We believe our revenues will continue to
increase  through the rest of 2001,  with a substantial  portion of our revenues
expected during our fourth fiscal quarter ending January 31, 2002, the Christmas
holiday  season.  We now offer  approximately  2,200  items from a number of toy
manufactures and anticipate that we will offer additional  items,  assuming that
we can obtain additional financing.



                                       7
<PAGE>

We had continuous  growth on a  quarter-over-quarter  basis from our website and
retail  operations.  Revenues were 13.6% higher for the second  quarter sales of
$46,466  ending July 31,  2001 over the first  quarter  sales of $40,929  ending
April 30, 2001.

Gross Margins:  Gross margins were $12,397 for the fiscal quarter ended July 31,
2001 and $29,960 for the six month period end July 31, 2001.  Gross margins as a
percentage of revenues were 26.7% for the fiscal quarter ended July 31, 2001 and
34.3% for the six month period ended July 31, 2001.

Expenses.  During our fiscal  quarter  ended July 31,  2001,  we incurred  total
expenses of $68,154  related  primarily  to: (i) enhancing  and  developing  our
website,  (ii) overhead  associated  with  operating two retail stores and (iii)
restocking and purchasing of inventory items. Total expenses declined by $87,477
(a 56.2%  decline) from $155,631  during the  three-month  period ended July 31,
2000, to $68,154 during the same period in 2001. The decline resulted  primarily
from a decline in consulting fees and sub-contract  expenses ($19,291 during the
quarter  ended July 31,  2001,  compared  to $57,404 in the same  period  2000);
investor  relations  ($Nil during the quarter  ended July 31, 2001,  compared to
$16,237 in the same period 2000) and office and administration expenses ($16,236
during the quarter  ended July 31, 2001,  compared to $34,563 in the same period
2000).

During the fiscal  quarter ended July 31, 2001, we paid  consulting  fees in the
amount  of  $19,291,  which  included  fees  paid  to:  (i) Axel  Miedbrodt  our
Operations Manager, (ii) Caroline Miskenick,  our customer service manager (iii)
two internal programmers and several retail store personnel,  and (iv) fees paid
to Albert R. Timcke, our President.  We paid legal and accounting fees of $6,191
($19,787 - 2000) during the fiscal  quarter  ending July 31, 2001 related to the
preparation of our filings with the Securities and Exchange Commission and other
legal and accounting matters.  During the fiscal quarter ended July 31, 2001, we
also incurred other expenses including: travel and automotive expenses of $1,302
($4,263 - 2000),  telephone  and utilities  expenses of $2,672  ($6,578 - 2000),
rent expenses of $7,555,  ($5,602 - 2000),  entertainment and promotion expenses
of $912 ($2,102 - 2000),  salaries & wages of $7,516  ($Nil - 2000),  web design
and maintenance expenses of $2,107 ($1,907 - 2000) and marketing and advertising
expenses  of $1,777  ($3,506  - 2000).  We  anticipate  that our  operating  and
administrative  expenses will increase  during the third and fourth  quarters of
our fiscal year 2001 as revenue growth  continues from our Internet  website and
retail  store  operations  and we  are  possibly  required  to  hire  additional
personnel for our operations.

During the six-month  period ended July 31, 2001, we incurred  total expenses of
$135,046,  compared  to  $277,552  during the same  period in 2000.  The decline
resulted  primarily from a decline in consulting fees and  subcontract  expenses
($47,025 during the six-month  period ended July 31, 2001,  compared to $127,343
in the same  period  2000);  investor  relations  expenses  ($4,455  during  the
six-month  period  ended July 31,  2001,  compared to $24,987 in the same period
2000) and office  and  administration  expenses  ($21,451  during the  six-month
period ended July 31, 2001, compared to $48,441 in the same period 2000).

During the six-month  period ended July 31, 2001,  we paid legal and  accounting
fees of $11,078 ($24,091 - 2000) related to one audit and the preparation of our
filings  with the  Securities  and  Exchange  Commission  and  other  legal  and
accounting  matters.  We also  incurred  other  expenses  including:  travel and
automotive  expenses of $2,151 ($11,918 - 2000),  telephone and utility expenses
of  $6,537  ($10,614  -  2000),  rent  expenses  of  $11,602  ($11,643  - 2000),
entertainment  and promotion  expenses of $1,184  ($6,140 - 2000),  salaries and
wages of $12,486  (Nil - 2000),  web design and  maintenance  expenses of $4,066
($1,907  -2000),  and marketing and  advertising of $7,130  ($4,636 - 2000).  We
anticipate that our operating and  administrative  expenses will increase during
the third  and  fourth  quarters  of our  fiscal  year  2001 as  revenue  growth
continues  from our  Internet  website and retail  store  operations  and we are
possibly required to hire additional personnel for our operations.

Net Loss.  We had a loss of $55,636  or $0.01 per share for the  fiscal  quarter
ended July 31,  2001,  compared to a loss of $148,845 or $0.01 per share for the
quarter ended July 31, 2000. We anticipate that we will continue to incur losses
at approximately the same levels of the losses incurred during the quarter ended
July 31, 2001 through at least the third quarter ended October 31, 2001.



                                       8
<PAGE>

During the  six-month  period ended July 31, 2001,  we had a loss of $104,656 or
$0.01 per share,  compared to a loss of $268,659 or $0.03 per share for the same
period in 2000.

Plan of Operation

During our fiscal quarter ended July 31, 2001, our quarter-to-quarter results of
operations  stabilized because of the seasonality of the specialty toy business.
We anticipate that our retail store outlet sales will remain flat throughout the
later  part of  summer  and begin to  increase  during  later  part of the third
quarter and into the fourth quarter as the Christmas  sales season  begins.  Our
shopping sites on Amazon. zshops and Yahoo shopping continue to have user viewer
growth with resulting sales.

Our  current  strategy is to focus on (i)  recruiting  and  training  additional
qualified operational and sales personnel; (ii) intensifying promotional efforts
for the Kidstoysplus.com Website and brand name; (iii) building market awareness
and  attracting  customers to the  Kidstoysplus.com  Website;  (iv) refining our
distribution,  fulfillment  and customer  service  operations and strategy;  (v)
actively  marketing  merchandise  through our  Kidstoysplus.com  Website;  (vii)
expanding the product line and mix of products available on the Kidstoysplus.com
Website;  (viii) developing  strategic  relationships with possible  fulfillment
vendors; (ix) expanding the content on the Kidstoysplus.com Website to appeal to
our target markets;  and (x) developing  functional cross marketing programs and
marketing information systems for our client base.

Our Marketing Strategy

Originally  our  marketing  strategy was to market  children's  toys and related
products  to  niche  market  segments  exclusively  over the  Internet.  We have
modified our original  business  plan and have  integrated  two physical  retail
store locations into our  operations.  We believe that a combination of Internet
retailing presence and physical retail storefront  operations will be the key to
our future  retailing  success.  Our pricing strategy is to sell our products at
prices that are  competitive  with or below the prices charged by other Internet
retailers and physical  facility based toy stores. We process and deliver orders
for our  products  between one to ten  business  days  depending on the delivery
method that the customer selects.

Online Service and Internet Advertising

We have established  additional  online retailing shops on various  high-traffic
Internet  portals,  such as  Amazon.zshops  and on Yahoo  shopping,  to increase
awareness of  kidstoysplus.com  and our product offerings.  We intend to further
develop this  marketing  concept on  additional  high-traffic  Internet  portals
throughout 2001. We believe that this type of Internet  advertising  provides us
with a great amount of exposure at a relatively low advertising cost.

Advertising and Public Relations

During the 2000 holiday season,  we published a catalogue which we mailed to our
customers.  We may publish a similar  catalogue for the 2001  Christmas  season,
assuming additional financing is obtained.  We intend to engage in a coordinated
program  of  print  advertising  through  specialized  and  general  circulation
newspapers and magazines.

Capital Requirements

Capital  requirements  of a high  technology  start-up  company are  continuous,
especially in the early years,  or until we can establish a revenue  stream from
product sales.

We anticipate  our  operating  budget to implement our business plan and to meet
our  financial  obligations  during the remainder of our fiscal year ending July
31, 2001, is anticipated to be as follows:



                                       9
<PAGE>

--------------------------------------------------------------------------------
    DESCRIPTION                                   October 31,       January 31,
                                                     2001              2001
--------------------------------------------------------------------------------
Accounting and legal expenses.                       $8,000           $12,000
--------------------------------------------------------------------------------
Office and administration                           $20,000           $15,000
--------------------------------------------------------------------------------
Website design and posting                           $5,000            $5,000
--------------------------------------------------------------------------------
Web maintenance and software upgrades                $5,000            $5,000
--------------------------------------------------------------------------------
Warehouse and office facilities                      $3,000            $3,000
--------------------------------------------------------------------------------
Company marketing expense                           $10,000           $10,000
--------------------------------------------------------------------------------
Selective increase product inventory                $40,000           $20,000
--------------------------------------------------------------------------------
Working capital                                     $30,000           $30,000
--------------------------------------------------------------------------------
Totals                                             $121,000          $100,000
--------------------------------------------------------------------------------


We believe our  estimates  of our capital  requirements  to be  reasonable.  The
capital  requirements  are only  estimates  and can  change  for many  different
reasons,  some of which are  beyond  our  control.

Liquidity and Capital Resources

As of July 31, 2001,  we had a working  capital of $40,996.  We had cash or cash
equivalents of ($222) and prepaid  expenses and deposits in the amount of $7,062
and inventory of $89,519. We had accounts payable and accrued liabilities in the
amount of $60,088.  We will be required  to raise at least  $125,000  during the
second  half of fiscal  2001 to meet our working  capital  requirements  through
January 31, 2001. Our ability to continue as a going concern is uncertain.

Our board of directors approved a Unit private placement offering under which we
intend to offer and sale Units,  consisting of one share of common stock and one
stock purchase warrant at $0.05 per Unit. Each warrant is exercisable to acquire
one  additional  share of  common  stock at $0.06  per share for a period of one
year.  During the fiscal  quarter ended July 31, 2001,  we have  received  three
subscriptions  for a total of  1,200,000  Units  for  proceeds  of  $60,000.  We
anticipate  that we will be  required  to  raise at least  $125,000  during  the
remaining fiscal year 2001 to meet our anticipated cash requirements  related to
our  operations and to expand our  operations,  including  acquiring  inventory,
marketing  expenses,  hiring  additional  personnel and refining our website and
distribution center technologies.

We have  not  entered  into any  other  arrangements  or  agreements  to  obtain
additional financing.  If we are unsuccessful in obtaining the financing we will
not be able to  continue  as a going  concern  and an  investment  in our common
shares may result in a loss of the investment made.

We cannot assure you that we will be able to obtain financing in a timely manner
or on acceptable terms, if at all. If we are unable to obtain financing there is
a  substantial  risk that such a strategy will  adversely  affect our ability to
build value in our  "Kidstoysplus"  brand name, which may have an adverse affect
on our business and our ability to compete effectively,  and we may be forced to
sell or liquidate our business.

Our Technology

We have developed and continue to develop software  technology that allows us to
deliver outstanding service and to achieve the economies we believe are inherent
to our  business.  Our strategy is to build strong brand  recognition,  customer
loyalty and supplier  relationships,  while  creating an economic  model that is
superior to other online and traditional capital and real  estate-intensive  toy
retailers. We believe that



                                       10
<PAGE>

our success  will depend on our ability to  continually  develop  technology  to
offer an online experience that is easy to use, useful, functional, entertaining
and educational.  We believe that our technology must meet or exceed the general
expectations of the virtual shopper who we believe will have experience shopping
with  other  online  retailers  and who will  expect a high  level of  technical
sophistication  from our website.  Refinements and continued  development on the
website beyond July 31, 2001 will be carried out in-house with  consultants.  We
anticipate  we will  spend  approximately  $10,000  to  $30,000  to  continually
enhance,  develop and modify the  software  technology  related to our  customer
service  and  support  systems,  inventory  control  systems,  distribution  and
logistical  facilitation systems,  accounting systems and other internal control
systems on a yearly basis.

The cost for  developing  technology  is expensive  and the process will require
continuous  testing and  refinement.  Our commercial  success will depend on our
ability to continually  attract visitors and shoppers to our website.  This will
require us to develop and use increasing sophisticated technologies to generate,
sustain and maintain  user  interest and  satisfaction.  We have hired  internal
programmers,  which  maintain and continue to develop the software  technologies
related  to our  internal  control  and  distribution  systems.  There can be no
assurance  that  we  will  continue  to   successfully   develop  and  test  the
technologies  related to the website or  contemplated  in our business plan on a
timely basis,  if at all. If we fail to  continually  enhance our website or our
support systems or fail to raise additional capital as planned, our business and
results of operations will be materially adversely affected.

Personalized Shopping Services

We offer  personalized  notification and shopping  services  through  telephone,
website and email services.

Customer Service

We believe that our ability to establish  and maintain  long-term  relationships
with our customers and encourage repeat visits and purchases  depends,  in part,
on the strength of our customer support and service operations.  We use frequent
communication  with and  feedback  from our  customers  in order to  continually
improve  both the online and retail store and our  services.  We offer an e-mail
address to enable customers to request information and to encourage feedback and
suggestions.  We also have  established  a team of customer  support and service
personnel who are responsible for handling general customer inquiries, answering
customer  questions about the ordering process,  and investigating the status of
orders, shipments and payments.

Personnel

As of July 31, 2001,  we had four (4)  full-time  personnel/consultants  and one
external  communications  consultant.  Albert  R.  Timcke,  a  director  and our
President,  assists with strategic corporate planning,  financing activities and
product  research  and  development.   Axel  Miedbrodt  our  vice  president  of
operations  responsible for  establishing  our distribution and customer service
facilities,  Caroline  Miskenack,  our customer service manager  responsible for
complete  customer  service  operations,  and Ian  Martinovsky  our retail store
supervisor  and  Jennifer   Choate  retail  clerk.  We  also  employ  five  part
time/casual employees.

In the  future,  we may  engage  additional  consultants  to  assist us with the
development   or  licensing  of  software  and   information   systems  and  the
implementation of our business plan.

Assuming adequate financing is available, we anticipate we will hire up to three
(3)  employees  during the third and fourth  quarters  of 2001 to provide  1-800
phone number consumer  support  services,  including one (1) employee to provide
marketing  and  sales  support,  one (1)  employees  to staff  our  distribution
warehouse, and one (1) information systems employee.

Our  success  will  depend in large part on our  ability  to attract  and retain
skilled and experienced  employees and consultants.  We do not anticipate any of
our employees will be covered by a collective bargaining agreement.



                                       11
<PAGE>

Back End System Support

We have  developed  a software  system  that  integrates  and that we believe is
capable of managing all of our website  functionality,  marketing,  distribution
and other  information.  The  information  captured by the software  system will
include: product offerings,  consumer information on products and manufacturers,
promotions,  pricing,  margin,  customer lists and customer  data,  shipping and
handling data,  customer support  information,  procedures and policies,  credit
information,   inventory  control,   procurement  and  distributor  information,
catalogues,  news and other information required to integrate our operations. We
have  developed a system that allows us to collect and analyze  information in a
single cohesive system that allows us to use and exchange information within our
organization.  In the future we may also integrate  certain parts of our systems
with strategic partners.

Fulfillment and Product Inventory

We source our products from a network of toy manufacturers and distributors.  We
carry  minimal  inventory  and rely to a large  extent on our ability to provide
inventory  for  customer  orders from past  customer  purchasing  statistics  to
maintain appropriate  inventory levels to fill orders for the products we offer.
We update our site daily with  inventory  information  received from our product
suppliers,  which will enable  customers to check the  availability  of products
before ordering. We currently transmit orders to our product suppliers manually.
Product  orders are issued  only when  product is required  and we meet  minimum
supplier product ordering requirements.

We stock a limited "in-house"  inventory of products to keep inventory values as
low as possible  in an attempt to conserve  cash.  We will hire  personnel  that
specialize  in sourcing  hard-to-find  "special  request"  toy products and fill
special request orders,  subject to availability in the future. We will ship our
in-house inventory directly from our distribution facility to our customers.

Our Distribution Center and Customer Service Center

Our principal  office,  customer  service and retail facility is located at 2924
Cliffe Avenue, Courtenay, B.C. This location is approximately 4,600 square feet,
which was originally  leased for a term of one year and then on a month-to-month
basis at a rental  rate of  approximately  $1,177.00  per month.  The company `s
leased premises contain its  administrative,  retail and  warehouse/distribution
facilities.

Intellectual Property

We have not  registered  any  trademarks in the United  States or elsewhere.  We
intend to submit an application to register the name  "Kidstoysplus.com"  as our
trademark  during 2001. We believe that we currently have no  technologies  that
are patentable.

Inflation

Our results of operations  have not been  affected by inflation  and  management
does not expect inflation to have a significant  effect on our operations in the
future.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None.

ITEM 2.  CHANGES IN SECURITIES

During the fiscal quarter ended July 31, 2001, we completed a private  placement
of  1,200,000  units to three  accredited  investors at $0.05 per unit for gross
proceeds of $60,000.  Each unit  consisted  of one common



                                       12
<PAGE>

share and one warrant  exercisable  to acquire one  additional  common  share at
$0.06 per share for a period of one year.  The units  were  offered  and sold in
reliance  upon an  exemption  from  registration  available  under  Rule  506 of
Regulation D promulgated  under the Securities  Act of 1933, as amended.  Offers
were made only to accredited investors.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FROM 8-K

         None.








                                       13
<PAGE>

                                   SIGNATURES

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


KIDSTOYSPLUS.COM, INC.
----------------------
(Registrant)



Date: September 14, 2001


 /s/ Albert R. Timcke
----------------------
Albert R. Timcke, Chairman of the Board of Directors,
President, Secretary   (principal
executive officer and director, principal accounting officer)









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