SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q


               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 0-25312

                       STARTECH ENVIRONMENTAL CORPORATION
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization                                Identification No.)
        Colorado                                                 84-1286576

                         15 Old Danbury Road, Suite 203
                            Wilton, Connecticut           06897
                 ------------------------------------------------
                (Address of principal executive offices) Zip Code

                                 (203) 762-2499
               --------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.

                                 YES   X   NO
                                     -----    -----

The number of shares outstanding for each of Registrant's classes of Common
Stock are as follows:

   Title of each class                          Outstanding at August 31, 2001
   -------------------                          ------------------------------

 Common Stock - No Par Value                              9,232,102

<PAGE>


                       STARTECH ENVIRONMENTAL CORPORATION

                                TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION                                        PAGE NO.
------------------------------                                        --------

Item 1.   Financial Statements

     Consolidated Balance sheets - July 31, 2001 (unaudited)             3
      and October 31, 2000

     Consolidated Statements of operations for the three months          4
      and nine months ended July 31, 2001 and 2000 (unaudited)

     Consolidated Statements of cash flows for the nine months           5
       ended July 31, 2001 and 2000 (unaudited)

     Notes to Consolidated Financial Statements (unaudited)             6-7

Item 2. Management's Discussion and Analysis of Financial              8-13
        Condition and Results of Operations

        Signatures                                                      14














                                       2

<PAGE>
<TABLE>
<CAPTION>

                                          PART I - FINANCIAL INFORMATION
                                           ITEM 1. FINANCIAL STATEMENTS
                                        STARTECH ENVIRONMENTAL CORPORATION
                                           CONSOLIDATED BALANCE SHEETS


                                                                                        (unaudited)        (audited)
                                                                                           July 31,      October 31,
                                                                                               2001             2000
                                                                                       ------------     ------------
<S>                                                                                    <C>              <C>
ASSETS
                                  Current assets:
         Cash and Cash Equivalents ..................................................  $  3,394,399     $  5,221,154
         Accounts receivable ........................................................       338,000          338,000
         Inventory ..................................................................     1,817,816          273,706
         Other current assets .......................................................        61,704           13,876
                                                                                       ------------     ------------

                  Total current assets ..............................................     5,611,919        5,846,736

         Property and equipment, net ................................................     1,752,769        1,157,950

         Other assets ...............................................................        77,451           73,195
                                                                                       ------------     ------------

                  Total assets ......................................................  $  7,442,139     $  7,077,881
                                                                                       ============     ============

LIABILITIES AND STOCKHOLDERS EQUITY
                               Current liabilities:
         Accounts payable ...........................................................  $    880,164     $    449,216
         Customer deposits ..........................................................     1,764,966                0
         Capital lease, current portion .............................................        37,850           23,907
         Other accrued expenses .....................................................       775,772          710,248
                                                                                       ------------     ------------
                  Total Current liabilities .........................................     3,458,752        1,183,371
                  Long-term liability:
         Capital lease payable, net of current portion ..............................        43,397           13,225
                                                                                       ------------     ------------

                  Total liabilities .................................................     3,502,149        1,196,596
                                                                                       ------------     ------------

Stockholders' (deficit) equity:

         Preferred stock, no par value 10,000,000 shares authorized; Shares
         issued and outstanding: 348,155 at July 31, 2001, (aggregate
         liquidation preference of $3,481,550) at July 31, 2001; 502,220
         (aggregate
         liquidation preference of 5,022,220) at October 31, 2000 ...................     3,324,532        4,641,483
         Common stock, no par value, 800,000,000 shares authorized;
         Shares issued and outstanding: 8,473,429 July 31, 2001
         and 8,085,660 at October 31, 2000 ..........................................     9,345,584        7,532,267
         Additional paid-in capital .................................................     1,742,745        1,742,745
         Accumulated deficit ........................................................   (10,472,872)      (8,035,210)
                                                                                       ------------     ------------
         Total stockholders' equity .................................................     3,939,990        5,881,285
                                                                                       ------------     ------------
                  Total liabilities and stockholders' equity ........................  $  7,442,139     $  7,077,881
                                                                                       ============     ============

                                 See accompanying notes to consolidated financial statements

                                                            3

<PAGE>


                                               STARTECH ENVIRONMENTAL CORPORATION
                                              CONSOLIDATED STATEMENT OF OPERATIONS
                                                         (UNAUDITED)


                                                         Three Months     Three Months      Nine Months      Nine Months
                                                                Ended            Ended            Ended            Ended
                                                        July 31, 2001    July 31, 2000    July 31, 2001    July 31, 2000
                                                        -------------    -------------    -------------    -------------

Revenue .............................................     $         0      $   239,607      $         0      $ 1,087,607

Cost of sales .......................................               0          128,469                0          537,355
                                                          -----------      -----------      -----------      -----------

Gross profit ........................................               0          111,138                0          550,252
                                                          -----------      -----------      -----------      -----------

Operating expenses
         Selling expense ............................         237,279           45,939          651,726          387,516
         Research and Development ...................          26,167           43,593           83,421           43,593
         General and administrative expense .........         561,800          721,686        1,624,071        1,967,652
                                                          -----------      -----------      -----------      -----------

Total operating expense .............................         825,246          811,218        2,359,218        2,398,761
                                                          -----------      -----------      -----------      -----------

Loss from operations ................................        (825,246)        (700,080)      (2,359,218)      (1,848,509)
                                                          -----------      -----------      -----------      -----------


Interest income .....................................          34,678           87,444          164,013          247,980
                                                          -----------      -----------      -----------      -----------



Loss before Income Taxes ............................        (790,568)        (612,636)      (2,195,205)      (1,600,529)
                                                          -----------      -----------      -----------      -----------

Income tax expense ..................................          16,928              940           27,788            7,710
                                                          -----------      -----------      -----------      -----------

Net loss ............................................     $  (807,496)     $  (613,576)     $(2,222,993)     $(1,608,239)
                                                          ===========      ===========      ===========      ===========

Net loss ............................................     $  (807,496)     $  (613,576)     $(2,222,993)     $(1,608,239)
Less: preferred dividends ...........................          63,200          171,676          214,669        2,166,745
                                                          -----------      -----------      -----------      -----------
Loss attributable to common shareholders ............     $  (870,696)     $  (785,252)     $(2,437,662)     $(3,774,984)
                                                          ===========      ===========      ===========      ===========

Net loss per share ..................................     $     (0.10)     $     (0.10)     $     (0.30)     $     (0.50)
                                                          ===========      ===========      ===========      ===========

Weighted average common
shares outstanding ..................................       8,445,738        7,772,238        8,263,134        7,484,994
                                                          ===========      ===========      ===========      ===========

                                   See accompanying notes to these consolidated financial statements

                                                               4
<PAGE>


                                     STARTECH ENVIRONMENTAL CORPORATION
                                           STATEMENT OF CASH FLOWS
                                                 (UNAUDITED)

                                                                         Nine Months Ended       Nine Months Ended
                                                                             July 31, 2001           July 31, 2000
                                                                         -----------------       -----------------
Cash flows from operating activities:
Net loss ............................................................         $(2,222,993)             $(1,608,239)
Adjustments to reconcile net loss to net cash provided
By operating activities:
Depreciation ........................................................             104,566                   38,307
401K plan match made by the issuance of shares ......................              50,736                    8,342
Expenses paid through the issuance of common stock ..................              20,961                   90,530
(Increase) decrease in accounts receivable ..........................                   0                 (330,755)
(Increase) decrease in inventory ....................................          (1,544,110)                (884,812)
(Increase) decrease in other current assets .........................             (47,828)                  (3,487)
(Increase) decrease in other assets .................................              (4,256)                 175,061
Increase (decrease) in accounts payable .............................             430,948                  295,578
Increase (decrease) in customer deposits ............................           1,764,966                        0
Increase (decrease) in accrued expense ..............................              65,524                  430,194
                                                                              -----------              -----------

Net cash used in operating activities ...............................          (1,381,486)              (1,789,281)
                                                                              -----------              -----------

Cash flows used in investing activities:
Capital expenditures ................................................            (621,804)                (200,149)
                                                                              -----------              -----------

Cash flows from financing activities:
Payment for capital leases ..........................................             (33,465)                 (14,069)
Proceeds from common stock issuance .................................             210,000                2,049,324
                                                                              -----------              -----------

Net cash provided by financing activities ...........................             176,535                2,035,255
                                                                              -----------              -----------

Net increase (decrease) in cash .....................................          (1,826,755)                  45,825
Cash at beginning of period .........................................           5,221,154                5,496,280
                                                                              -----------              -----------

Cash and cash equivalents at end of period ..........................         $ 3,394,399              $ 5,542,105
                                                                              ===========              ===========
Supplemental Discloser- Taxes Paid ..................................              27,788                    7,710
                                                                              ===========              ===========


                                See accompanying notes to consolidated financial statements

                                                         5
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<PAGE>



                       STARTECH ENVIRONMENTAL CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of Startech Environmental Corporation
(referred to herein as the "Company", unless the context indicates otherwise)
presented herein are unaudited. In the opinion of management, these financial
statements include all adjustments necessary for a fair presentation of the
financial position. Results for the nine months ended July 31, 2001 are not
necessarily indicative of results for the entire year. The accompanying
financial statements should be read in conjunction with the Company's financial
statements and related footnotes for the year ended October 31, 2000 which are
included in the Company's annual report on form 10-K for the period ended
October 31, 2000.

Basic earnings per share are calculated by dividing net income by the weighted
average number of common shares outstanding. For the nine months ended July 31,
2001 and 2000, the basic weighted average shares outstanding were 8,263,134 and
7,484,994. Diluted earnings per share reflect net income divided by the weighted
average number of common shares, dilutive stock options outstanding, CDA
warrants, and the outstanding convertible preferred shares. For the nine months
ended July 31, 2001 and 2000, the weighted average number of common shares,
dilutive stock options, CDA Warrants, and outstanding convertible preferred
shares outstanding were 9,566,451 and 9,153,573 respectively.

Note 1.  Basis of Presentation:

On November 17, 1995, Startech Corporation, a private Connecticut corporation,
was acquired in a reverse acquisition, in which all the then issued and
outstanding shares of common stock of Startech Corporation were exchanged for
4,000,000 shares of Kapalua Acquisitions, Inc.'s common stock. After the
acquisition and exchange of stock, the former shareholders of Startech
Corporation owned 80.5% of the common stock of Kapalua Acquisitions, Inc.

On January 2, 1996, Kapalua Acquisitions, Inc. changed its name to Startech
Environmental Corporation. The financial statements of Startech Environmental
Corporation include all of the accounts of Startech Corporation. This
acquisition has been accounted for under the purchase method in the accompanying
financial statements. The fiscal year end for both companies before the
acquisition was October 31, and the financial statements for all periods
presented have been restated to reflect the combination of the two companies.

Note 2.  Capital Lease Obligation:

The Company has entered into capital lease obligations for computer, telephone,
and capital equipment. The term of the leases range from 24 to 39 months, with
principal and interest due in aggregate monthly installments of $5,226 at
interest rates ranging from 0% to 32.3%. The equipment was capitalized at
$121,919 and is being depreciated over five to fifteen years. Depreciation
expense for the nine months ended July 31, 2001 was $9,528.

Note 3.  Equity Transactions

For the three months ended July 31, 2001 the Company declared and paid a stock
dividend on its Series A convertible preferred in the amount of $63,200, which
represented 6,320 preferred shares. For the nine months ended July 31, 2001 the
Company declared and paid a stock dividend on its Series A convertible preferred
in the amount of $214,669, which represented 21,467 preferred shares (includes
the 6,320 preferred shares referred to above).

                                       6

<PAGE>


Note 4. Cash Flow

During the nine months ended July 31, 2001 the Company had non-cash
transactions. The following is a listing of these transactions and the dollar
value of the stock associated with these transactions.

<TABLE>
<CAPTION>


Nine months ended July 31, 2001 and 2000                                      July 31, 2001             July 31, 2000
----------------------------------------                                      -------------             -------------

<S>                                                                               <C>                       <C>
Common shares for services rendered                                               $20,961                   $90,530
Preferred stock dividend                                                          214,669                   385,698
Fixed assets financed through capital leases                                       77,580                    38,401
Series A convertible preferred shares converted to common shares                1,531,620                 1,312,181
Accretion of dividends associated with the issuance of the                              0                 1,742,445
convertible preferred shares
Accrued Preferred Dividends                                                        33,485                    38,602
401k Plan Match                                                                    50,736                     8,342
</TABLE>


Note 5.  Interim Financial Information (Unaudited)

The interim financial statements of the Company for the nine months ended July
31, 2001 and 2000, included herein, have been prepared by the Company, without
audit, pursuant to the rules and regulations of the SEC. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principals have been condensed or
omitted pursuant to the rules and regulations relating to interim financial
statements.

Note 6.  Revenue Recognition

The Company recognizes revenue on the sale of its manufactured products at the
date of shipment. Revenues earned from consulting and design services are
recognized when the services are completed.

Note 7.  Employee Benefit Plan

On June 1, 2000 The Company implemented an employee savings plan designed to
qualify under Section 401(k) of the Internal Revenue Code. This plan is for all
full-time employees who have completed 30 days of service. Company contributions
are made in the form of common stock at the prevailing current market price and
will vest equally over a three-year period. The Company will match the first 6
percent of the contribution on a dollar for dollar basis up to the maximum
contribution allowed under Internal Revenue Code. Contributions for the nine
months ended July 31, 2001 were $50,736, which represents approximately 10,095
shares of our common stock.

                                       7
<PAGE>


CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q contains forward-looking statements that are
made pursuant to the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward looking statements, annual reports and other
periodic reports and filings of the Company filed with the Securities and
Exchange Commission. All statements, other than statements of historical facts,
which address the Company's expectations for the future with respect to
financial performance or operating strategies, can be identified as
forward-looking statements. As a result, there can be no assurance that the
Company's future results will not be materially different from those described
herein as "believed," "anticipated," "estimated" or " expected," which reflect
the current views of the Company with respect to future events. We caution
readers that these forward-looking statements speak only as the date hereof. The
Company hereby expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any such statements to reflect any change
in the Company's expectations or any change in events, conditions or
circumstances on which such statement is based.


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

Overview

We design, make and sell our proprietary waste processing system called the
Plasma Converter(TM), and a proprietary hydrogen separation system called
StarCell(TM). The Plasma Converter system is a process whereby the waste
materials put into the system are safely and economically destroyed, reformed
and recovered by a process called dissociation without leaving behind or
creating any harmful residues or emissions. Instead, the Plasma Converter
creates reusable commodity products from the world's wastes. StarCell is our
new, patented hydrogen selective membrane system that separates hydrogen from
Plasma Converted Gas (PCG).

The principal Plasma Converter(TM) achievement is that it safely and
irreversibly destroys hazardous and toxic wastes, in all their forms, no matter
how lethal, at a low cost and without any harmful emissions or residues. No
smokestacks, no ash, no harmful leftovers. We are confident that no other
technology can do this. The Converter performs far safer than prevailing
environmental standards and saves customers large amounts of money along with
producing positive cash flows.

Industry throughout the world is faced with the task of satisfying the
ever-increasing demand for new products, more choices and greater quantities.
With that comes the need to solve the economic and environmental challenges that
accompany that growth. We help industries of every kind save money and remediate
the waste materials produced in meeting that challenge.

Our intention is to dominate the global waste market with an economical and
environmentally superior waste processing system for all forms of hazardous and
non-hazardous organic and inorganic waste and by-products, and in addition,
convert those wastes into valuable commercial products. That system is the
Plasma Converter.

                                       8

<PAGE>


The Startech R&D phase has been successfully completed. We are now making and
selling systems.

The interior temperature of the arc in the plasma plume within the vessel can be
as high as 30,000 degrees Fahrenheit . . . three times hotter than the surface
of the Sun. When waste materials are subjected to the intensity of the energy
within the vessel the excitation of the molecular bonds is so great that the
waste material's molecules break apart into their elemental components (atoms).
It is the absorption of this energy by the waste material that forces the waste
destruction and elemental dissociation.

Dissociation means that the molecular bonds of waste materials are broken apart
and separated into their elemental components (the atoms). The elements are then
reformed into recoverable non-hazardous commodity products. The process is not a
combustion process or a burning process, and the Converter must not be confused
with an incinerator or a vitrification system. It is the enormous intensity of
the energy field produced by the plasma, lightning-like arc operating within the
Plasma Converter vessel that causes the dissociation process.

While such a capability is achievement enough, the Converter also recycles these
wastes by our proprietary process of "closed-loop elemental recycling" into
valuable commercial commodity products. In processing most wastes, the Converter
also produces more energy than it uses in the process.

The U.S. Department of Commerce estimates the global environmental technology
market is $400 billion dollars per year, and is expected to grow $600 billion
dollars per year by 2010. 1994 spending in the U.S. alone was $165 billion
dollars. Municipal Solid Waste comprises 4% of the world's waste. Industrial and
hazardous waste comprises the remaining 96%. It is this 96% that is our market.

The most important commercial product derived from the process is Plasma
Converted Gas (PCG) (TM). PCG is a clean synthesis gas that can be used to
produce electricity, fresh water, and commercial chemicals and to produce plant
heating and cooling. PCG is also a zero-cost source of hydrogen for use in
direct hydrogen engines and fuel cells through our StarCell system. The
Converter operates at a performance level that is far safer than the
environmental standards of the United States Environmental Protection Agency and
other comparable international environmental regulatory agencies.

StarCell is the Company's new, patented hydrogen selective membrane system that
separates hydrogen from Plasma Converted Gas (PCG). PCG is the clean synthesis
fuel-gas mixture produced from processing materials through the Plasma
Converter. StarCell is an advanced-technology filtration system. Once the
hydrogen is filtered out, the remaining carbon-based synthesis gas can still be
used as a valuable fuel or even as a chemical feedstock.

The increasing importance of the need for alternative energy sources and the
emergence of the "Hydrogen Economy" drove our development of StarCell. Hydrogen
is clearly recognized as a very real alternative to our ever-depleting, limited
reservoir of fossil fuels. But more than that, hydrogen is the pristine fuel.
When used as a fuel, it produces only water vapor (fresh water) as the
by-product. As a fuel, Hydrogen produces no carbon by-products. Although energy
production is not our main objective, the ability to economically separate this
highly sought-after gas from an already valuable PCG synthesis gas is another
step forward in our plan to achieve market domination with our primary product,
the Plasma Converter.

                                       9

<PAGE>


StarCell is not a fuel cell; it is a ceramic membrane filtration system that
extracts hydrogen from PCG. PCG contains a large quantity of hydrogen.
Pound-for-pound, hydrogen contains more energy punch than all the other fuels;
and, when used in engines and fuel cells produces only clean water vapor with no
carbon by-products.

While hydrogen is the most abundant material in the universe, it is not readily
accessible. Expensive and sophisticated chemical-industry processes must be used
to extract it. Nearly all of the hydrogen produced today is made from fossil
fuels. This expensive reformation process is exactly what our Plasma Converter
does in the process of destroying most feedstock. In a manner of speaking, we
get the "reformation" for nothing.


Recent Developments
-------------------

In addition to the specific activities discussed below we have been actively
showcasing our technology to potential domestic and international customers, in
both industry and government, since February 2001. We have many initiatives in
various stages of the sales cycle and these initiatives include ongoing
discussions with major manufacturers, oil and gas companies, power generation
companies, waste management firms, federal and state agencies, and an assortment
of hospitals.

We announced on June 6, 2001 that on May 24th, 2001, the Plasma Converter was
presented to The International Chemical Weapons Demilitarization Conference that
was held in Japan and attended by more than 250 demilitarization experts,
scientists and government officials from 20 countries around the world. The
purpose of the 3-day Conference was to help decision-makers find the practical
solution to the safe and irreversible demilitarization of chemical weapons
located around the world. "Demilitarization" is a military term meaning
destruction. The Conference Selection Committee chose the Plasma Converter for
presentation. Elisabeth French, of UXB International Corporation, with the
support of Joseph S. Klimek of Startech, presented the Converter in a scientific
paper to an audience of about 250 as the commercial solution for the needs of
the worldwide Demil community. UXB is a Startech strategic alliance partner. UXB
is one of the largest internationally recognized explosive ordnance disposal
companies in the world.

On June 27, 2001 a Letter of Intent from Eco Tech Ltd., was received for a
20,000 pound-per-day Mobile Plasma Converter (TM) system to process hazardous
waste in Ireland. Prior to the contract being issued, Eco Tech has to confirm
the terms with the financial institution that will fund the project, and receive
the final approval document for the Irish Environmental Protection Agency. We
are still in the process of completing these two tasks with Eco Tech Ltd.

On June 28, 2001 we announced that we were featured in the May 2001 issue of the
Fuel Cell Industry Report, a Scientific American Newsletter publication, and we
were also the subject of an article in the April 2001 is of Fuel Cell Technology
News. The feature articles illustrate Startech's ability to create a cheap
source of hydrogen from the wastes of the world using a combination of our
principal product, the Plasma Converter(TM), and its patented hydrogen
separation technology called StarCell(TM).

                                       10

<PAGE>


On June 29, 2001 we announced an audio interview with CEO. The interview focused
on the company's main product, the Plasma Converter(TM), which can destroy toxic
and hazardous waste irreversibly and safely in a cost effective manner, and the
growing importance of StarCell(TM), a patented hydrogen separation membrane. The
interview can be heard by logging onto the CEOcast website www.ceocast.com.

On July 10, 2001 we announced that we demonstrated the successful operation of
our hydrogen vehicle by driving it around Bristol, Connecticut, the location of
the Company's Demonstration and Training Center (the Center). The Center houses
an operating industrial-sized Plasma Converter(TM) system and the new
StarCell(TM) unit. The vehicle is a white Ford pickup truck with a 4-cylinder
engine and a standard transmission.

Shell Hydrogen and Sunline Transit Agency logos are prominently displayed on the
truck along with the names of industrial, governmental and educational
organizations that are also playing a leading role in advancing hydrogen vehicle
transportation. Sunline Transit Agency is a world leader in commercializing
hydrogen fuel technologies and is a recognized force in the development of
low-cost, pollution-free transportation. Shell Hydrogen is a global business of
the Royal Dutch/Shell Group of companies. Shell Hydrogen develops business
opportunities and provides energy solutions to promote a hydrogen fuel economy.

On July 12, 2001 the Company announced it leased 30,000 square feet of clear,
high-bay industrial space in Bristol, Connecticut, 5 minutes away from the
Startech Demonstration and Training Center in Technology Park. The space will be
used for manufacturing assembly and as a containerization and staging area.

On August 9, 2001 The Company announced that it has signed a strategic alliance
agreement with the Hydro-Chem Company, a subsidiary of Linde AG, to produce and
sell combined Plasma Converter Methanol systems and plants to produce low cost
methanol from a variety of feed stock materials processed by the Plasma
Converter previously regarded as hazardous and non- hazardous waste. Linde AG, a
global chemical industry company employing approximately 19,000 people, is one
of the leading gas producing companies in the world. Hydro-Chem, a subsidiary of
Linde, is an industrial leader in the design and production of low cost
factory-built industrial gas plants to produce methanol.

On August 23, 2001 we announced that we commenced shipment of Eiko Systems
Corporation's first Plasma Converter(TM) to process hazardous waste incinerator
ash and also PCBs in Fukuoka, Japan. The last container was shipped on August
28th 2001. Joseph Klimek, Startech Executive VP, said, "Considering the fact
that the customer increased the scope of the contract during manufacturing,
we're actually a little ahead of schedule."


                                       11

<PAGE>


Result of Operations
--------------------

Comparison of three months ended July 31, 2001 and 2000

Revenues. We had no revenue for the three months ended July 31, 2001, as
compared to $239,607 for the same period in 2000, a decrease of $239,607. This
decrease in revenue was primarily attributable to the fact that we did not
physically deliver any systems during the third quarter, nor did we receive any
revenue for services. Although we did receive progress payments during the
quarter totaling $455,000 dollars from a sale to Eiko, these progress payments
along with further progress payments cannot be recognized as revenue until
delivery of the completed system, which was shipped from our facility in August
of 2001.

Gross Profit. Because we did not report any revenue we had no gross profit for
the three months ended July 31, 2001 as compared to $111,138 for the same period
in 2000, a decrease of $111,138. Because there was no revenue or associated
costs recognized for the three months ended July 31, 2001 there is no gross
profit reported.

General and Administrative expenses. Our general and administrative expenses for
the three months ended July 31, 2001 were $561,800, a decrease of $159,886, or
22.2%, from the same period in 2000. The decrease is a result of labor expenses
being allocated to selling expenses, and direct labor expenses associated with
the completion of the Eiko system. However without these allocations our
expenses would have been higher by $44,987, which is attributable to, increases
in labor, rent, and utilities.

Research and Development expenses. Our research and development expenses for the
three months ended July 31, 2001 were $26,167 a decrease of 40.0%, from the same
period in 2000. This decrease is related to lower travel costs and reduced
compensation expenses.

Selling Expenses. Our selling expenses for the three months ended July 31, 2001
were $237,279 an increase of $191,340 or 416.5%, from the similar period in
2000. The increase is due to a selling labor expense allocation. However without
this allocation our expenses would have been higher by $36,860 that is
attributable to increases in consultants and marketing expenses.

Interest income. Our interest income for the three months ended July 31, 2001
was $34,678, as compared to $87,444 in the similar period 2000 a decrease of
60.3%. The decrease is due to lower cash balances and lower interest rates
earned on our investments resulting from the Federal Reserve lowering short-term
interest rates.

Income taxes. Income taxes for the three months ended July 31, 2001 were $16,928
as compared with $940 in the similar period 2000. The increase is due to a
higher equity base resulting in a higher tax liability to the State of
Connecticut. We have tax loss carry forwards of $7.9 million to offset against
future profits.

Comparison of nine months ended July 31, 2001 and 2000

Revenues. We had no revenue for the nine months ended July 31, 2001, as compared
to $1,087,607 for the same period in 2000, a decrease of $1,087,607. This
decrease in revenue was primarily attributable to the fact that we did not
physically deliver any systems during the third quarter, nor did we receive any

                                       12

<PAGE>


revenue for services. Although we did receive progress payments for the nine
months ended totaling $1,645,000 dollars from a sale to Eiko, these progress
payments along with further progress payments cannot be recognized as revenue
until delivery of the completed system, which shipped from our facility in
August of 2001.

Gross Profit. We had no gross profit for the nine months ended July 31, 2001 as
compared to $550,252 for the same period in 2000, a decrease of $550,252.
Because there was no revenue recognized or associated costs for the nine months
ended July 31, 2001 there is no gross profit reported.

General and Administrative expenses. Our general and administrative expenses for
the nine months ended July 31, 2001 were $1,624,071, a decrease of $343,581, or
17.5%, from the same period in 2000. The decrease is a result of labor
allocations to selling expenses, direct labor expenses associated with the
completion of the Eiko system, and to the completion of our demonstration unit
in Bristol, CT. However without these allocations our expenses would have been
higher by $335,941, which is attributable to increases in labor, employee
benefits, rent, and utilities related to our demonstration and training facility
in Bristol, CT.

Research and Development expenses. Our research and development expenses for the
nine months ended July 31, 2001 were $83,421 an increase of $39,828 or 91.4%,
from the same period in 2000. This increase is related to costs associated with
our engineering and design advances for certain sub-systems on the Plasma
Converter.

Selling Expenses. Our selling expenses for the nine months ended July 31, 2001
were $651,726 an increase of $264,210, or 68.2%, from the similar period in
2000. The increase is due to the fact that we now include certain salary costs
of our employees and executives as selling expenses, and additional expenses
related to our training and demonstration showroom in Bristol, Connecticut.

Interest income. Our interest income for the nine months ended July 31, 2001 was
$164,013, as compared to $247,980 in the similar period 2000 a decrease of
33.9%. The decrease is due to lower cash balances and lower interest rates
earned on our investments.

Income taxes. Income taxes for the nine months ended July 31, 2001 were $27,788
as compared with $7,710 in the similar period 2000. The increase is due to a
higher equity base resulting in a higher tax liability to the State of
Connecticut. We have tax loss carry forwards of $7.9 million to offset against
future profits.

Liquidity and Capital Resources
-------------------------------

As of July 31, 2001, we had cash of $3,394,399 and working capital of
$2,153,167. During the quarter ended July 31, 2001, our cash decreased by
$863,753. This was primarily due to purchases of equipment for our showroom
facility in Bristol, Connecticut, and an increase of inventory for the
production of the Eiko unit coupled with a second quarter net loss.

Our investing activities have consisted primarily of short-term high quality
liquid investments, with maturities with three months or less when purchased,
which are considered cash equivalents. The primary investments are high quality
commercial paper, U.S. treasury notes and Treasury-bills.

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<PAGE>


For the three months ended July 31, 2001 the Company declared a quarterly
dividend on its Series A convertible preferred in the amount of $63,200, which
was paid by the issuance 6,320 preferred shares.

We believe that cash generated from operations, our current cash balances, and
other sources of capital, will be sufficient to satisfy our projected working
capital and planned capital expenditures for at least 12 months.



                                    SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on this 14th day of
September 2001.


                                     STARTECH ENVIRONMENTAL CORPORATION
                                     (Registrant)

                                      BY: /S/ Joseph F. Longo
                                          --------------------------------------
                                           Joseph F. Longo
                                           CEO, President and Treasurer

                                     BY:  /S/ Robert L. DeRochie
                                          --------------------------------------
                                           Chief Financial Officer,
                                           Vice President Investor Relations,
                                           (Principal Financial Officer)


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