25


           U.S. SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C. 20549
                         FORM 10-QSB

                         (Mark One)

[x]  QUARTERLY REPORT PURSUANT SECTION 13 OR  15(D)  OF  THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:    September 30, 2000

[  ]  TRANSITION REPORT PURSUANT SECTION 13 OR 15(D) OF  THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________

               Commission file number 0-17232

                 CAPITAL RESERVE CORPORATION
            (Exact name of small business issuer
                as specified in its charter)

COLORADO                                   84-0888594
(State or other                            (IRS Employer
jurisdictionof                          Identification No.)
incorporation or organization)

                    335 25th STREET, S.E.
                   CALGARY, CANADA T2A 7H8
           (Address of principal executive offices)

                       (403) 204-0260
                 (Issuer's telephone number)

                       NOT APPLICABLE
   (Former name, former address and former fiscal year, if
                 changed since last report)

Check  whether the issuer (1) filed all reports required  to
be  filed by Section 13 or 15(d) of the Exchange Act  during
the  past  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 __

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

     6,536,393 shares of common stock, no par value,  as  of
     November 14, 2000.

Transitional Small Business Disclosure Format (check one):
Yes___ No _X_





                PART I FINANCIAL INFORMATION

ITEM I FINANCIAL STATEMENTS

     The   accompanying  unaudited  condensed   consolidated
financial  statements have been prepared in accordance  with
generally   accepted  accounting  principles   for   interim
financial information and with the instructions for Form 10-
QSB and Rule 10-01 of Regulation S-X.  Accordingly, they  do
not include all of the information and footnotes required by
generally   accepted  accounting  principles  for   complete
financial  statements.  In the opinion  of  management,  all
adjustments  considered necessary for  a  fair  presentation
have  been  included. All such adjustments are of  a  normal
recurring  nature.   Operating results for  the  nine  month
periods   ended  September  30,  2000  and  1999   are   not
necessarily  indicative of the results that may be  expected
for   the  year  ending  December  31,  2000.   For  further
information, refer to the consolidated financial  statements
and  footnotes  thereto  included in  the  Company's  Annual
Report on Form 10-KSB for the year ended December 31, 1999.

                                        Page

Independent Auditors' Review                 3

Consolidated Financial Statements

Balance Sheet                                4

Statements of Operations                     5

Statements of Stockholders' Equity           6

Statements of Cash Flows                     7

Notes to Consolidated Financial Statements        8 to 11

Review Report of Independent Certified Public Accountants

Board of Directors - Capital Reserve Corporation

We have reviewed the accompanying balance sheet of Capital
Reserve Corporation as of September 30, 2000 and the related
statements of operations for the three and nine month
periods then ended and statement of cash flow for nine month
period ended September 30, 2000, in accordance with
Statements of Standards for Accounting and Review Services
issued by the American Institute of Certified Public
Accountants.  All information included in these financial
statements is the representation of Capital Reserve
Corporation.

A review of interim financial statements consists
principally of inquiries of Company personnel responsible
for financial matters and analytical procedures applied to
financial data.  It is substantially less in scope than an
audit conducted in accordance with generally accepted
auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a
whole.  Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying
financial statements in order for them to be in conformity
with generally accepted accounting principles.

Miller and MCCollum, CPA's
Lakewood, Colorado
November 14, 2000


              CAPITAL RESERVE CORPORATION
              Consolidated Balance Sheet
                  September 30, 2000

<TABLE>
<S>                                        <C>
CURRENT ASSETS

Cash                                       $14,128
Accounts Receivable                        17,348
Loans Receivable                           503,814
Prepaid Expense                            39,757

Total Current Assets                       575,047

LOANS RECEIVABLE - LONG TERM               1,406,583

FIXED ASSETS

Oil and Gas Leases                         692,003
Buildings                                  2,090,011
Office Equipment and Computers
(Net of Accumulated Depreciation of $3,320 22,134

Total Fixed Assets                         2,804,148

Total Assets                               4,785,778

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts Payable                           57,002
Accrued Expenses                           15,000
Current Portion of Long-Term Debt          156,850

Total Current Liabilities                  228,852

Advances Payable                           469,360
Shareholders' Deposits                     212,970
Long-Term Debt                             1,489,244

Total Liabilities                          2,400,426

STOCKHOLDERS' DEFICIT (Notes 1, 4 and 5)

Class A Common Stock Authorized 20,000,000 Shares
of no par value; issued and outstanding
6,536,393 shares                            6,094,069
Accumulated Deficit                         (3,708,717)
Total Stockholders' Equity                  2,385,352
Total Liabilities and Stockholders' Equity  4,785,778

                          </TABLE>

           Commitments and Contingencies - Note 2
  The notes to these financial statements should be read in
                    conjunction with the
   Audited Financial Statements for the fiscal year ended
                     December 31, 1999.

                 CAPITAL RESERVE CORPORATION
            Consolidated Statement of Operations
            Nine Months Ended September 30, 2000
                           <TABLE>
                      For the Three Months For the Nine Months
                      Ended September 30   Ended September 30
                      2000     1999    2000     1999
<S>                   <C>      <C>     <C>      <C>
Revenue
Oil and Gas Revenue   $ 41,013 $ -     $52,955  $-
Operating Costs       26,740     -     33,831   -
Gross Profit          14,273     -     19,124   -
Rental Income         32,629     -     101,134  -
Cost of Goods Sold    25,835     -     65,739   -
Gross Profit          6,794      -     35,395   -

Interest Income       24,527     -     50,206   -

Expenses

General and
   Administrative     49,284   26,354    430,892    80,455
Total Expenses        49,284   26,354    430,892    80,455
Income (Loss) Before
   Income Taxes       (3,690) (26,354)  (326,167)  (80,455)
Income Taxes            -        -         -         -
Net Income (Loss)     (3,690) (26,354)  (326,167)  (80,455)
Net Income (Loss) Per
  Common Share        $(0.00)   (0.02)     (0.08)    (0.06)

                          </TABLE>
  The notes to these financial Statements should be read in
                    conjunction with the
   Audited financial Statements for the fiscal year ended
                     December 31, 1999.

              CAPITAL RESERVE CORPORATION
    Consolidated Statements of Stockholders' Equity
     Nine Months Ended September 30, 2000 and 1999

                        <TABLE>
<S>          <C>     <C>      <C>      <C>    <C>
            Class A Stock     Class B  Stock
               Common           Preferred

            Shares     Amount     Shares   Amount    Accumulated
                                                     Deficit
December   546,045     3,138,102  250,000   50,000   (3,166,302)
31, 1997

Issuance   250,000   20,060        -          -         -
of Common
Stock,
Net of
Offering
Costs of
$4,940

Net              -        -        -          -         (43,331)
(Loss)

December    796,045  3,158,162    250,000   50,000    (3,209,633)
31, 1998

Conversion  200,000     50,000   (250,000) (50,000)        -
of Class B
Preferred
Stock
Into
Common
Stock

Issuance  1,183,820    166,732        -        -         -
of Common
Stock,
Net of
Offering
Costs of
$3,650

Net              -        -           -        -      (172,917)
(Loss)

December     2,179,865  3,374,894     -        -    (3,382,550)
31, 1999

Issuance       817,050    408,525     -        -         -
of Common
Stock to
Acquire
Oil and
Gas
Leases

Issuance     2,348,235  1,796,820
of Common
Stock,
Net of
Offering
Costs of
$64,800

Issuance       775,513     98,098
of Shares
for
Services
Rendered

Warrants       415,732    415,732
Exercised

Net               -           -            -        -     326,167
Income
(Loss)

             6,536,395  6,094,069          -        -  (3,708,717)

                          </TABLE>
  The notes to these financial statements should be read in
  conjunction with the Audited Financial Statements for the
            fiscal year ended December 31, 1999.

                 CAPITAL RESERVE CORPORATION
            Consolidated Statements of Cash Flows
                           <TABLE>
                                                    For the Nine
                                                    Months Ended
                                                    September 30
<S>                                                <C>         <C>
                                               2000           1999
Cash From Operating Activities:
Net Income (Loss) From Continuing Operations $(326,167)       $(80,455)

Reconciling Adjustments
Depreciation and Amortization                    7,303           -
Issuance of Shares for Services                 98,098
Acquisition of Property                        408,525

Changes in Operating Assets and Liabilities
Accounts Receivable                            115,518         (72,000)
Loans Receivable                              (972,897)          -
Prepaid Expenses and Deposits                    8,656           -
Accounts Payable and Accrued Expenses          180,860          13,662

Net Cash Flows from Operating Activities      (480,104)       (138,793)

Cash From Investing Activities:
Acquisition of Oil and Gas Properties         (692,002)           -
Acquisition of Property and Equipment       (2,119,448)           -
Proceeds from (Payments to) Advances
   Payable                                     314,360        70,000
Proceeds from Investor Deposits                212,970        -
Net Cash Flows From Investing Activities    (2,284,120)       70,000

Cash From Financing Activities:
Long Term Debt                               1,489,244      -
Issuance of Common Stock                     1,339,852        61,500
Offering Costs                                 (64,800)       (3,650)
Net Cash Flows from Financing Activities     2,764,296        57,850
Net Change in Cash and Cash Equivalents             72       (10,943)
Cash at Beginning of Period                     14,056        11,517
Cash at End of Period                          $14,128         $ 574

</TABLE>
   The notes to these financial statements should be read
in conjunction with the Audited Financial Statements for the
             fiscal year ended December 31 1999.

CAPITAL RESERVE CORPORATION
Notes to Consolidated Financial Statements
September 30, 2000

Note 1 - Management's Statement

In  the  opinion  of management, the accompanying  unaudited
consolidated  financial statements contain  all  adjustments
(all  of which are normal and recurring in nature) necessary
to  present fairly the financial position of Capital Reserve
Corporation  as  of September 30, 2000, and the  results  of
operations  for  the  three months  and  nine  months  ended
September  30,  2000 and 1999 and cash flows  for  the  nine
months  ended  September 30, 2000, and 1999.  The  Notes  to
Consolidated  Financial Statements, which are  contained  in
the  Form  10-KSB for the period ending December  31,  1999,
should  be  read  in  conjunction  with  these  consolidated
financial statements.

For  the  purposes  of consolidation the  exchange  rate  of
0.6663 from Canadian to U.S. dollars has been applied as  at
September  30,  2000.  Any transactions completed  prior  to
September  30,  2000  are accounted at the  then  prevailing
exchange rate as at the date of the transaction.

Organization

The  Company  was  incorporated in  Colorado  in  1982,  and
operated  as  an  insurance  agency  and  a  life  insurance
company.  The insurance business was sold in 1994.

The Company had minimal operating revenues after the sale of
its  life insurance company and rental property.  Management
attempted  to  start  a  financial  consulting  and   public
relations  business.   The Company entered  into  its  first
consulting agreement in January 1997, which expired in 1998.
The Company virtually had no operations from the end of 1998
until late 1999.  During that time, the Company attempted to
locate  appropriate  acquisition or merger  candidates.   In
1999,  the  Company's principal place of business  moved  to
Canada.  In November 1999, the Company formed a wholly-owned
subsidiary,  Capital  Reserve  Canada  Limited,  an  Alberta
corporation  ("Capital  Canada"),  to  locate  and   acquire
producing oil and gas assets in Canada.

Operations

Lease  Agreement/Acquisition of Commercial Property:  During
the  quarter  ended March 31, 2000, Capital  Canada  entered
into  a five-year lease agreement for 14,107 square feet  of
office and laboratory space in Calgary, Alberta.  The  lease
agreement included an option to purchase the building on  or
before  July  31,  2000. The building is a total  of  22,507
square  feet and the purchase price is $1,522,800.   Capital
Canada  gave notification to the landlord of its  intent  to
purchase  the building on June 30, 2000. Under the terms  of
the  purchase  option, the landlord will apply  50%  of  the
basic  rent paid for a period of six months to the  purchase
price.   The landlord, Capital Canada and the Company agreed
to  extend the closing date to August 31, 2000. The  Company
applied   for   and   obtained   financing   of   $1,079,040
($1,600,000CDN)  to close the purchase during  the  quarter.
Ended September 30, 2000.

The transaction closed successfully on August 31, 2000.  As
at September 30, 2000 the Company had entered into three
five-year, non-cancelable lease arrangements with two un-
related corporations and Capital Canada to lease all
rentable square footage totaling 22,145.5 square feet.
Rentable square footage includes both office and laboratory
facilities.  Subsequent to entering into a lease arrangement
with the Company, Capital Canada entered into three sublease
arrangements with respect to 3,813.4 square feet of rentable
square footage.  The Company expects to see revenues from
these lease arrangements of approximately $10,232 per month,
net of monthly financing obligations and operating costs.
See below, "Note 2 - Commitments and Contingencies".

During the quarter ended September 30, 2000 the Company
signed an offer to purchase a second commercial building
with a purchase price of $183,232.  Subsequent to quarter
end the offer was accepted and closing has been set as
December 1, 2000.  The Company anticipates it will pay cash
obtained from accounts receivable, which come due prior to
the date of closing, for the full purchase price.

Oil and Gas Acquisition:  During the quarter ended March 31,
2000,  Capital  Canada also acquired a  5%  percent  working
interest  in  producing oil and gas leases and a  processing
facility located in Alberta, known as Chestermere, for total
cash  and  stock  consideration of $612,787 ($900,000  CDN).
The  Company  agreed to issue a total of 817,050  shares  of
common  stock at $0.50 per share and paid a cash payment  of
$204,262.

The  cash  portion of the consideration was  raised  from  a
$689,900  ($1  million  CDN)  credit  facility  provided  by
Alberta Treasury Branch to Capital Canada.

During the quarter ended September 30, 2000 the Company
entered into a Farmout Agreement and Casing Point Agreement
with Hancock Enterprises whereby the Company is required to
pay a 5% cost interest in a well known as the Freedom Dome
Well located in Rosebud County, Montana to earn a 4% net
revenue interest in the drill spacing unit before payout and
a 3.5% net revenue interest after payout, as well as a 3.5%
working interest in the balance of 1,766.73 acres.  In
addition, the Company is required to pay a 5% cost interest
in a well known as the Pioneer Well located in Garfield
County, Montana to earn a 0.58928% working interest in the
Tyler formation only, subject to total lease overriding
royalties of 19.1%.  The Company also purchased a 4% working
interest in 54,237.57 acres for $18.00 per acre.  To the
quarter ended September 30, 2000 the Company had expended a
total of $34,805 towards the dry hole costs for the Pioneer
and Freedom Dome wells.

Acquisition of Residential Property:  In connection with the
Consulting Agreement agreed to between the Company  and  its
President,   Mr.  W.  Scott  Lawler  (see  "  -   Consulting
Agreements" below), the Company purchased a home in the City
of  Calgary  for  Mr. Lawler's personal use.   The  purchase
price  of the home was $550,015 ($815,000CDN).  The  Company
assumed  a  variable  interest rate  mortgage  from  Alberta
Treasury Branch in the amount of $384,554 amortized over  25
years.   On  May 1, 2005, the loan can either be  repaid  or
renewed  with  the  interest  rate  converted  to  the  then
prevailing rate.  Title to such property is in the  name  of
the  Company.  Mr. Lawler provided funds to the  Company  in
the  amount of $167,842 to pay for the down payment and  all
closing costs associated with the purchase.  The funds  were
provided  in  the form of a subscription for shares  of  the
Company's common stock.  See "Note 3 - Private Placements of
Common  Stock."   The  monthly  payments  of  principal  and
interest are $2,636, which Mr. Lawler is obligated to  make,
along   with  all  payments  for  property  taxes,  property
insurance and maintenance.

If  and  when the property is sold, the Company will receive
any  and all gains (and/or losses) from such sale, less  the
cost  of any pre-approved improvements to the property  paid
for  by  Mr. Lawler.  However, Mr. Lawler has the option  of
acquiring  title  to  the property (and thus  all  resulting
gains  or  losses)  by:  (a)  assuming  or  paying  off  the
Company's mortgage; and (b) surrendering to the Company  the
167,842 shares of common stock obtained from the Company  in
a  private  placement. See "Note 3 - Private  Placements  of
Common Stock."

Consulting Agreement

As  of April 24, 2000, the Company entered into a Consulting
Agreement  with its President and a member of its  Board  of
Directors, Mr. W. Scott Lawler, pursuant to which Mr. Lawler
agreed  to relocate to Calgary, Alberta, Canada, to work  at
the   Company's  facilities  in  Calgary  and  devote   more
substantial time to the operations of the Company.  The term
of the Consulting Agreement is two (2) years, with an option
on  Mr. Lawler's part to extend for one (1) additional year.
Mr. Lawler will receive an annual salary of $75,000.00, plus
stock  options (at terms yet to be determined) and automatic
annual  salary  increases of fifteen percent  (15%).   As  a
further inducement to Mr. Lawler to move to Calgary  on  the
Company's  behalf,  the Company purchased  a  home  for  Mr.
Lawler's  personal use.  In turn, Mr. Lawler is  responsible
for  all  payments on the mortgage, for property  insurance,
for  property taxes and for maintenance. Mr. Lawler provided
the  down payment and the closing costs associated with  the
purchase.    See  "  - Acquisition of Residential  Property"
above.

Use of Estimates

The  preparation  of the Company's financial  statements  in
conformity  with  generally accepted  accounting  principles
requires  management to make estimates and assumptions  that
affect  the  amounts reported in these financial  statements
and  accompanying notes.  Actual results could  differ  from
those estimates.

Basis of Consolidation

The  consolidated financial statements include  the  Company
and  its  wholly-owned  subsidiary, Capital  Reserve  Canada
Limited.    All   significant  inter-company  accounts   and
transactions have been eliminated.

Depreciation

Depreciation  has  been  provided in amounts  sufficient  to
relate  the  costs of depreciable assets to operations  over
their  estimated useful lives principally on  the  straight-
line method from two (2) to five (5) years.

Treasury Stock

Treasury stock has been treated as common stock redeemed and
canceled consistent with the Colorado Revised Statutes.

Earnings (Loss) Per Share

Earnings (loss) per share of common stock is computed  based
on 4,105,390 and 1,363,737 weighted average number of common
shares  outstanding during the nine (9) month periods  ended
September  30,  2000 and 1999, respectively.  Fully  diluted
earnings per share are not presented because they are  anti-
dilutive.

Note 2 - Commitments and Contingencies

During the quarter the Company purchased a commercial
property for a total purchase price of $1,522,800.  The
Company applied for and obtained a mortgage with a five-year
term, amortized over 15 years at an interest rate of 8.6%
per annum with respect to a principal amount of $1,079,040
(CDN$1,600,000) to close the purchase.  In addition,
operating costs associated with  the commercial property are
estimated to be $4.16 (CDN $6.25) per square foot for a
total of $92,222 annually with respect to total rentable
square footage of 22,145.5 square feet.  The following table
outlines minimum monthly obligations with respect to this
purchase, including operating costs, with remaining terms in
excess of one year:

       2001 $217,825
2002 $217,825
2003 $217,825
2004 $217,825
2005 $217,825

See  "Note  1 - Operations - Lease Agreement/Acquisition  of
Commercial Property"

Note 3 - Private Placement of Common Stock

During  the fiscal year ended December 31, 1999, the Company
offered  for  sale  up to 2,000,000 units  of  common  stock
pursuant  to  Rule  506 promulgated by  the  Securities  and
Exchange  Commission under the Securities  Act  of  1933  at
$0.50  per unit, each unit consisting of one share  and  one
warrant  to  acquire a like number of additional  shares  of
common  stock at $1.00 per share.  As of June 30, 2000,  the
offering was over-subscribed and the Company had received  a
total  of  $1,412,415  in  subscription  deposits  (net   of
refunded  subscriptions).  The Company elected  to  exercise
its  right under the terms of the offering to accept only  a
portion of each subscriber's subscription, and to allow each
of  them  to  apply  the  un-accepted  portion  towards  the
purchase  price of the warrants issuable with  the  accepted
portion  of their subscriptions.  As at June 30,  2000,  the
offering was fully subscribed and subscribers had elected to
exercise  a  total of 415,730 warrants. During  the  quarter
ended  September 30, 2000 the Company issued  all  remaining
shares  and  warrants subscribed under  the  offering.   The
total  net  proceeds  to  the Company  from  this  offering,
including $415,730 from the exercise of warrants and net  of
commissions and finders fees, was $1,350,930.

In  connection  with the purchase of real  estate  discussed
above (See "Note 1 - Operations - Acquisition of Residential
Property"),  the  Company's President, Mr. W.  Scott  Lawler
provided  the Company with funds in the aggregate amount  of
$167,842.  These funds were used by the Company to cover the
down   payment  and  closing  costs  associated  with   such
purchase.   Subsequent to the quarter ended June  30,  2000,
the  Company and Mr. Lawler agreed that such funds would  be
used by the Company as subscription proceeds from Mr. Lawler
to  purchase 167,482 shares of the Company's common stock at
$1.00  per  share.  The shares are to be issued pursuant  to
the  exempt  from registration found in Rule 506 promulgated
by   the  Securities  and  Exchange  Commission   under  the
Securities  Act  of 1933.  The net proceeds to  the  Company
realized  from this offering was $167,842, as this  offering
was  made without the use of any agent or salesman  and  was
conducted without any costs, commissions or finders' fees.

On  September  25,  2000,  the Company  along  with  Synergy
Technologies   Corporation  and  its  subsidiaries,   Carbon
Resources Limited and Lanisco Holdings Limited, entered into
an  Amended and Restated Technology Transfer Agreement  with
Dr.  Pierre  Jorgensen. Dr. Jorgensen is the inventor  of  a
heavy  oil  upgrading technology for which the  Company  has
provided  development  funds.  The  terms  of  the  original
acquisition  of this technology provided Dr. Jorgensen  with
sixty-five percent of the royalties earned on the technology
until  he  received an aggregate of $1 million US  at  which
time the rate would be reduced to thirty-five percent. Also,
title  to the technology was to remain in trust and  not  be
delivered  until Dr. Jorgensen had reached  the  $1  million
payout.  The  terms  of this amended and restated  agreement
provide  Dr.  Jorgensen with only five percent  of  the  net
proceeds realized from the licensing and/or sublicensing  of
the technology, along with 500,000 shares of common stock of
the  Company and 500,000 shares of common stock  of  Synergy
Technologies Corporation. See "Note 4 below". Moreover,  the
title  to the technology was immediately released to Lanisco
Holding Limited.

Note 4 -Loans Receivable & Loans Receivable - Long Term

Loans Receivable of $503,814 represents the current portion
of monies advanced to various unrelated corporations.  These
amounts bear interest calculated on the daily outstanding
principal at 2% above prime rate and have terms of three
years from date of the loan.  Repayment terms are annually
on the last day of each year.  $183,103 of this amount is
the current portion of the total funds of $1,419,692
advanced to Texas T Petroleum, Ltd. with respect to the
development of a proprietary heavy oil upgrading technology.

Loans  Receivable - Long Term of $1,406,583  represents  the
long   term   portion   of  monies   advanced   to   various
corporations. These amounts bear interest calculated on  the
daily outstanding principal at 2% above prime rate and  have
terms  of three years from the date of the loans.  Repayment
terms  are annually on the last day of each year.   Included
in this amount are funds advanced to Texas T Petroleum, Ltd.
with  respect to the development of a proprietary heavy  oil
upgrading  technology totaling $299,089 and  $937,500  which
amount  represents  the issuance of 500,000  shares  of  the
Company  on  behalf of Texas T Petroleum, Ltd. at  a  deemed
value  of $1.875 per share.  See "Note 3 - Private Placement
of Common Stock" above.

Note 5 -Long Term Debt

The Company's subsidiary, Capital Canada has a $674,400 ($1
million CDN) demand revolving bank term facility with a
Canadian banking institution.  Under the terms of the
agreement, the facility is initially capped at $199,890
($300,000 CDN) and will increase pending successful closing
of certain oil and gas leases currently under review.  This
capped amount has been drawn upon and represents $199,890 of
the amount of long-term debt reflected on the consolidated
balance sheet of the Company.  The loan bears interest at
the Bank of Canada prime rate plus 1% payable on the last
day of each month.  The revolving credit facility is subject
to an annual review and specifies no repayment terms
provided certain covenants related to the facility are met.
As collateral security the Company's subsidiary, has pledged
a $3,372,000 ($5 Million CDN) floating charge debenture over
all of its assets.

During the quarter the Company purchased a commercial
property for a total purchase price of $1,522,800.  The
Company applied for and obtained a mortgage with a five-year
term, amortized over 15 years at an interest rate of 8.6%
per annum with respect to a principal amount of $1,079,040
(CDN$1,600,000) to close the purchase.  Monthly payments of
interest and principal are $10,467 ($15,709 CDN).

Note 6 - Advances Payable

Advances  Payable  of  $469,360 are  advances  from  various
unrelated  parties that bear no interest and have no  stated
terms  of repayment.  This amount includes $368,060 advanced
by  an unrelated corporation with respect to the purchase of
a commercial property during the quarter ended September 30,
2000.

Note 7 - Recent Accounting Pronouncements

In June of 1998, the FASB issued Statement of Accounting
Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities."  SFAS 133 established
accounting and reporting standards for derivative
instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities.  It
requires that an entity recognize all derivatives as either
assets or liabilities on the balance sheet at their value.
This statement, as amended by SFAS 137, is effective for
financial statements for all fiscal quarters to all fiscal
yeas beginning after June 15, 2000.  The Company does not
expect the adoption of this standard to have a material
impact on its results of operations, financial position or
cash flows, as the Company currently does not engage in any
derivative or hedging activities.

ITEM  2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR  PLAN  OF
OPERATION

GENERAL

     Capital   Reserve  Corporation  (the   "Company")   was
incorporated  under  the laws of the State  of  Colorado  on
August  3,  1982.   The  Company  is  in  the  business   of
investments in oil and gas projects and real estate.

     As  of  September  30, 2000, the Company  has  one  (1)
wholly-owned subsidiary, Capital Reserve Canada Limited,  an
Alberta corporation ("Capital Canada").  Capital Canada  was
incorporated on December 8, 1999 and is in the  business  of
locating and acquiring oil and gas properties. The Company's
other  subsidiary,  Wall  Street Investments  Corp.  had  no
activity  for  the  last  two (2) years  and  was  dissolved
earlier this year.

     On   March   1,   2000,   the  Company's   wholly-owned
subsidiary,  Capital Canada, entered into an Asset  Purchase
Agreement   (the  "Asset  Agreement")  with   Stone   Canyon
Resources  Ltd.,  an Alberta corporation  ("Stone  Canyon").
Pursuant to the Asset Agreement, Capital Canada acquired all
of  the  interests held by Stone Canyon in certain producing
oil  and  gas  leases and a processing facility  located  in
Alberta, Canada, known as Chestermere.  The purchase   price
for  this acquisition was $612,787 ($900,000 CDN) which  was
paid  as  follows:  $204,262  ($300,000  CDN)  in  cash  and
$408,525  ($600,000 CDN) in shares of common  stock  of  the
Company, valued at $0.50 US per share which per share  price
was  converted  to  Canadian dollars by the  average  of  US
dollar buy and sell rates of the end of business on the date
immediately  preceding the closing of the  Asset  Agreement.
The  closing was held on March 21, 2000.  The Company issued
817,050  shares in connection with this transaction on  June
8, 2000.

      As  of September 30, 2000, the Company had funded,  by
way of repayable loans, $1,419,692 for the development of  a
heavy-oil upgrading technology.  Included in this amount  is
$937,500  with respect to the issuance of 500,000 shares  of
the common stock of the Company to the inventor of the heavy-
oil  upgrading  technology, on behalf of Texas  T  Petroleum
Ltd.   (See "ITEM. 5 OTHER INFORMATION" below.  The  Company
made  these  funds  available to Texas T Petroleum  Ltd.,  a
Colorado  corporation,  of  which  Mr.  James  F.  Marsh  is
president  and  a director; Mr. Marsh is also the  president
and  a  director  of Capital Canada. Texas T Petroleum  Ltd.
holds an option to purchase up to fifty percent (50%) of the
outstanding shares of the owner of the heavy oil technology,
Carbon  Resources  Limited,  a Cyprus  corporation  ("Carbon
Resources").   The  heavy oil technology is  a  proprietary,
patented technology believed to be able to reduce by  up  to
seventy  percent (70%) the costs associated  with  upgrading
heavy  crude  oil to light crude oil.  In order to  exercise
the option and acquire the shares of Carbon Resources, Texas
T  must fund a total of $900,000.  As at September 30, 2000,
Texas  T  had  funded  $884,023,  which  is  secured  by  an
assignment of Texas T's option to acquire an interest in the
technology.   Subsequent to the quarter  Texas  T  Petroleum
fulfilled its obligation to fund $900,000 and acquired a 50%
interest  in  Carbon Resources.  Concurrently,  the  Company
completed a private placement of 2,000,000 Units of Texas  T
Petroleum  at  $0.50 per Unit, each Unit consisting  of  one
share and one share purchase warrant entitling the holder to
purchase  one  additional share at $1.00  per  share  for  a
period of two years.

     As  of  June 30, 2000, the Company had also  funded  to
Stone  Canyon,  by  way  of repayable  loans,  $430,814  for
working capital to allow for development of a gas-to-liquids
technology.    The loan accrues interest at the rate  of  2%
over  prime.   During the quarter September 30, 2000,  Stone
Canyon  repaid  the principal amount of such loan  plus  all
accrued interest thereon.

     During the quarter ended September 30, 2000 the Company
advanced  $320,711 to Ocean Exploration Limited.   The  loan
accrues interest at a rate of 2% over prime and is unsecured
with no specific terms of repayment.

     During the quarter ended September 30, 2000 the Company
entered into a Farmout Agreement and Casing Point Agreement
with Hancock Enterprises whereby the Company is required to
pay a 5% cost interest in a well known as the Freedom Dome
Well, located in Rosebud County, Montana to earn a 4% net
revenue interest in the drill spacing unit before payout and
a 3.5% net revenue interest after payout, as well as a 3.5%
working interest in the balance of 1,766.73 acres.  In
addition, the Company is required to pay a 5% cost interest
in a well known as the Pioneer Well located in Garfield
County, Montana to earn a 0.58928% working interest in the
Tyler formation only, subject to total lease overriding
royalties of 19.1%.  The Company also purchased a 4% working
interest in 54,237.57 acres for $18.00 per acre.  To the
quarter ended September 30, 2000 the Company had expended a
total of $34,805 towards the dry hole costs for the Pioneer
and Freedom Dome wells.

     During  the  quarter the Company purchased a commercial
property  in  which its corporate headquarters are  located,
for  a  total  purchase  price of $1,522,800.   The  Company
applied  for and obtained a mortgage with a five-year  term,
amortized  over  15 years at an interest rate  of  8.6%  per
annum  with  respect  to a principal  amount  of  $1,079,040
(CDN$1,600,000) to close the purchase.  As at September  30,
2000  the  Company  had  entered into three  five-year,  non
cancelable    lease   arrangements   with   two   un-related
corporations and Capital Canada to lease all rentable square
footage  totaling  22,145.5 square  feet.   Rentable  square
footage  includes  both  office and  laboratory  facilities.
Subsequent  to  entering into a lease arrangement  with  the
Company,   Capital  Canada  entered  into   three   sublease
arrangements with respect to 3,813.4 square feet of rentable
square  footage.  The Company expects to see  revenues  from
these lease arrangements of approximately $10,232 per month,
net of monthly financing obligations and operating costs.

     During the quarter ended September 30, 2000 the Company
signed an offer to purchase a second commercial building
with a purchase price of $183,232.  Subsequent to quarter
end the offer was accepted and closing has been set as
December 1, 2000.  The Company anticipates it will pay cash
obtained from accounts receivable, which come due prior to
the date of closing for the full purchase price.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company's working capital at September  30,  2000,
was $346,195 as compared to ($24,076) at September 30, 1999.
A  majority of the Company's current assets are in the  form
of  accounts  receivable  and loans  receivable.  Since  the
Company   does  not  have  extensive  sources  of   revenue,
operating   expenses   could   deplete   working    capital.
Furthermore,  if  the Company should generate  an  operating
loss  for  the current year comparable to the loss  incurred
for  the  year ended December 31,1999, a substantial portion
of  the Company's remaining cash and working capital will be
depleted.   The Company had current liabilities of  $228,852
at  September 30, 2000, as compared to $96,650 at  September
30, 1999.

RESULTS OF OPERATIONS

     The Company had total revenues of $204,294 for the nine
(9) months ended September 30, 2000.  Comparatively, for the
nine  months  ended September 30, 1999, the Company  had  no
revenues.   The Company's revenues from the current  quarter
were  not sufficient to meet its total operational expenses.
The  Company's  sources of revenue are  limited  to  monthly
rental  income  of $28,384 (commencing September  1,  2000),
interest  income of approximately $8,000 per month and  less
than $3,000 per month from a 5% working interest in oil  and
gas leases and a process facility, known as Chestermere.

     The  monthly  rental income is derived from  two  lease
agreements, both expiring in August 2005 (excluding a  third
lease  with  Capital Canada - see "PART II,  ITEM  5.  OTHER
INFORMATION"  below)  and  three sublease  agreements  which
expire  one in April 2001 and two in August 2005. Lease  and
sublease agreements have aggregate rental income of  $10,232
per  month, net of operating expenses.  The Company incurred
cost  of  goods sold associated with the rental  income  for
this   quarter  in  the  amount  of  $25,835,  which  amount
represents  a pro rata portion of the Company's  obligations
under  its  lease.  The Company anticipates it  will  derive
annual  net  revenues  from  this  commercial  property   of
approximately $122,784, which should assist the  company  in
meeting other monthly obligations.

     The  Company has shown on its statements of  operations
as  interest income the amount of interest that has  accrued
on  the  promissory  notes it holds from Texas  T  Petroleum
Ltd., Stone Canyon and Ocean Exploration Limited during  the
quarter ended September 30, 2000. $18,263 has accrued on the
note  from Texas T Petroleum and $4,247 has accrued  on  the
note from Ocean Exploration.  $2,017, which had accrued from
Stone Canyon, was paid in full during the quarter.

     As  the  result  of  the sale of its  securities  in  a
private  placement, which was commenced in fiscal year  1999
(see  "ITEM 2. CHANGES IN SECURITIES"), the Company received
$1,412,415  in gross proceeds for the nine (9) month  period
ended September 30, 2000.

     The  Company  intends to remain involved in  Texas  T's
funding   of  the  development  of  a  heavy-oil   upgrading
technology.   See,   "ITEM  2. MANAGEMENT'S  DISCUSSION  AND
ANALYSIS  OR  PLAN  OF OPERATION - GENERAL"  above.   As  of
September  30,  2000,  the Company has  funded  a  total  of
$1,419,692  towards  development of  this  technology.   The
Company's continued involvement in this project will require
the Company to provide additional funds.

     The Company, most likely, will need to attempt to raise
additional  funds  from  equity  sales,  borrowings,   joint
ventures  or  merger/acquisition  candidates  to  meet   the
funding  needs  of  its  projects  and  also  its  operating
expenses.

     General  and administrative expenses for the  nine  (9)
months  ended September 30, 2000 were $430,892  compared  to
$80,455 for the same period in the previous year.

     The  net  loss from continuing operations for the  nine
(9)  months ended September 30, 2000, was $326,167  compared
to $80,455 for the same period in the previous year.


                 PART II - OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS

     Not Applicable.

ITEM 2.      CHANGES IN SECURITIES

     On  July  22,  1999,  the Company commenced  a  private
placement offering, pursuant to Rule 506 promulgated by  the
Securities and Exchange Commission under the Securities  Act
of  1933,  of up to 2,000,000 of its units, with  each  unit
comprised  of  one share of common stock and  a  warrant  to
purchase  an  additional share for $1.00.  As of  March  31,
2000,  the offering was over-subscribed and the Company  had
received  $1,412,415 in subscription deposits.   During  the
quarter ended June 30, 2000, the Company elected to exercise
its  right under the terms of the offering to accept only  a
portion of each subscriber's subscription, and to allow each
of  them  to  apply  the  un-accepted  portion  towards  the
purchase   price  of  the  warrants  issuable   with   their
subscriptions  to  date.  As a result, the  subscribers  had
elected to exercise a total of 415,730 warrants.  The  total
proceeds  to  the  Company  from  this  offering,  including
$415,730  from the exercise of warrants, and net commissions
and finders fees, was $1,350,930.

     On   March   21,   2000,  the  Company's   wholly-owned
subsidiary, Capital Canada, purchased an interest in certain
oil  and gas producing leases and a process facility located
in  Alberta,  Canada, known as Chestermere. As part  of  the
consideration  for this purchase, the Company,  on  June  8,
2000,  issued  817,050 shares of it's  common  stock.   See,
"ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR  PLAN  OF
OPERATION - GENERAL".

     On  September 25, 2000, the Company agreed to issue  to
Dr.  Pierre  Jorgensen  500,000 shares  in  return  for  his
agreement  to reduce his royalty on the heavy oil  upgrading
technology  from  sixty-five percent to 5%. Such  agreements
were  part  of  an Amended and Restated Technology  Transfer
Agreement  entered  into  by the parties.  The  shares  were
valued  at  $1.875  per share or $937,500  in  total.   See,
"ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR  PLAN  OF
OPERATION - GENERAL".

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     Not Applicable

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

     Not Applicable

ITEM 5.   OTHER INFORMATION

     The  Company's wholly-owned subsidiary, Capital Canada,
acquired  approximately 14,107 square  feet  of  office  and
laboratory space in Calgary, Alberta Canada, pursuant  to  a
written  five (5) year lease agreement. The lease  agreement
provided  that  Capital  Canada would  make  lease  payments
totaling $160,520 during the fiscal year ending December 31,
2000,  and  $177,617  each fiscal year  thereafter.  Capital
Canada   also  had  the  right  to  purchase  the   premises
(consisting of a total of approximately 22,507 square  feet)
at  a price of $1,522,800.  On June 30, 2000, Capital Canada
gave  notification to the landlord of its intent to purchase
the  building.  The landlord, the Company and Capital Canada
agreed  to extend the closing date of the purchase to August
31,  2000. The transaction closed successfully on August 31,
2000.   The  original  lease agreement that  Capital  Canada
entered  into in January 2000 was amended to put the Company
in  the place of "lessor" and reduce the originally acquired
square  footage.  As at September 30, 2000, the Company  had
entered  into three lease agreements, each with a five-year,
non-cancelable   term  with  two  un-related   corporations.
Pursuant  to  such  leases (including the one  with  Capital
Canada) all rentable square footage totaling 22,145.5 square
feet  is currently leased.  Rentable square footage includes
both office and laboratory facilities.

     Subsequent   to   entering  into  the   amended   lease
agreement  with  the  Company, Capital Canada  entered  into
three  sublease  agreements with respect to  3,813.4  square
feet of rentable square footage.  These agreements cover all
of the space that Capital Canada leased from the Company.

     The   Company   has   monthly   mortgage   obligations,
inclusive  of operating costs, for the purchased  commercial
property totaling $18,152. As a result of current lease  and
sublease  arrangements, the Company expects to see  revenues
from  these lease arrangements of approximately $10,232  per
month,   net   of   the  aforementioned  monthly   financing
obligations and operating costs.
ITEM 5. EXHIBITS AND REPORTS ON FORM 8-K
  a.   Exhibits and Index of Exhibits - see Exhibit Index
     below.
b.   Reports on Form 8-K - None.
                         SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
                 CAPITAL RESERVE CORPORATION

Date: November 13, 2000

By: _/s/ W. SCOTT LAWLER______
Name:   W. Scott Lawler
Title: President
By:_/s/ SHARON PATMORE_____
Name: Sharon Patmore
Title: Secretary-Treasurer

                        EXHIBIT INDEX

REGULATION
S_B NUMBER        EXHIBIT                        REFERENCE

3.1                                     Articles of
                                        Incorporation, as
                                        amended
                                        Incorporated by
                                        reference to the
                                        Exhibits previously
                                        filed with the
                                        Company's Annual
                                        Report on Form 10-
                                        KSB for the fiscal
                                        year ended December
                                        31, 1990

3.2                                     Amended Bylaws
                                        Incorporated by
                                        reference to the
                                        Exhibits previously
                                        filed with the
                                        Company's Annual
                                        Report on Form 10-
                                        KSB for the fiscal
                                        year ended December
                                        31, 1994

10.1                                    Management Agreement
                                        with Mr. Loder
                                        Incorporated by
                                        reference to the
                                        Exhibits previously
                                        filed with the
                                        Company's Annual
                                        Report on Form 10-
                                        KSB for the fiscal
                                        year ended December
                                        31,

10.2                                    Lease Agreement
                                        dated January 15,
                                        2000
                                        incorporated by
between Capital Reserve Canada Limited       reference to
                                        Exhibit
and 319835 Alberta Ltd.
                                        10.14 previously

Company's Annual
                                        Report on Form 10-
                                        KSB for the fiscal
                                        year ended December
                                        31, 1999

10.3 Purchase and Sale Agreement dated
 March 1, 2000 by and between Capital Reserve
Incorporated by
Canada Limited and Stone Canyon Resources         Exhibits
previously
Limited
                                        Files with the
                                        Company's Annual
                                        Report on Form 10-
                                        KSB for the fiscal
                                        year ended December
                                        31, 1999

27                                      Financial Data
                                        Schedule
                                        Filed herewith