SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C.  20549

                          FORM 10-QSB

   [XX]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934


              For the Quarter Ended January 31, 2001
                                    ----------------

                             or

   [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
        THE SECURITIES EXCHANGE ACT OF 1934

                         000-31117
                  ------------------------
                  (Commission File Number)


           GRAND ENTERTAINMENT & MUSIC (G.E.M), INC.
    ------------------------------------------------------
    (Exact name of Registrant as specified in its charter)

      Florida                                        65-0941045
-------------------------------                   ---------------
(State or other jurisdiction of                   (IRS Employer
 incorporation or organization)                    Identification
                                                   Number)


           4862 Mayfair Avenue, Montreal, Quebec H4V 2E7
           ---------------------------------------------
            (Address of Principal Executive Offices)


                         (514) 328-9348
                -------------------------------
                (Registrant's Telephone Number)


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

                   YES [X]      NO     [ ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.

                   YES   [ ]      NO     [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the Issuer's classes
of common stock, as of the latest practicable date.

17,683,000 SHARES OF COMMON STOCK, OF $.001 PAR VALUE WERE ISSUED AT
MARCH 16, 2001.


<PAGE>


              GRAND ENTERTAINMENT & MUSIC (G.E.M), INC.


                                 INDEX
                                 -----

          PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Interim Consolidated Balance Sheet - October 31,
          2000(Unaudited).

          Interim Consolidated Statement of Operations - October 31,
          2000 (Unaudited).

          Interim Consolidated Statement of Shareholders' Equity -
          October 31, 2000 (Unaudited)

          Interim Consolidated Statement of Cash Flows - October 31,
          2000 (Unaudited).

          Notes to Consolidated Financial Statements.

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


PART II.  OTHER INFORMATION

Item 4.   Submission of Matters to a Vote of Securityholders

Item 5.   Other Information

Item 6.   Exhibits and Reports on Form 8-K


SIGNATURES




<PAGE>    2


           GRAND ENTERTAINMENT & MUSIC (G.E.M), INC.




PART I - FINANCIAL INFORMATION
         ---------------------

Item 1.  Financial Statements



<PAGE>    3






                  GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

                INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                             JANUARY 31, 2001


<PAGE>    4

                 GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

                            Table of Contents


                                                                 Exhibit

Review Engagement Report

Interim Consolidated Balance Sheet.........................  A

Interim Consolidated Statement of Retained Earnings........  B

Interim Consolidated Statement of Earnings.................  C

Interim Consolidated Statement of Cash Flows...............  D

Notes to Interim Consolidated Financial Statements



<PAGE>    5


                         REVIEW ENGAGEMENT REPORT



         To the Shareholders of
         Grand Entertainment & Music G.E.M. Inc.



         We have reviewed the consolidated balance
         sheet of Grand Entertainment & Music G.E.M.
         Inc. as at January 31, 2001 and the
         consolidated statements of retained earnings,
         earnings and cash flows for the period then
         ended.  Our review was made in accordance
         with generally accepted standards in the
         United Stated of America for review
         engagements and accordingly consisted
         primarily of enquiry, analytical procedures
         and discussion related to information
         supplied to us by the Company.

         A review does not constitute an audit and
         consequently we do not express an audit
         opinion on these consolidated financial
         statements.

         Based on our review, nothing has come to our
         attention that causes us to believe that
         these consolidated financial statements are
         not, in all material respects, in accordance
         with generally accepted accounting principles
         in the United States of America.




         Chartered Accountants


         Montreal, Quebec
         March 12, 2001



<PAGE>    6

                                                                 Exhibit A

                  GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

                    INTERIM CONSOLIDATED BALANCE SHEET
                          As at January 31, 2001
                               (UNAUDITED)

<TABLE>
<CAPTION>
                                                      US Dollars      US Dollars
                                                      January 31,     January 31,
                                                         2001            2000
                                                      -----------     -----------
                                                          $               $
<S>                                                   <C>             <C>
                        ASSETS
CURRENT
  Accounts receivable                                     208,485          149,271
  Record masters and preproduction costs
    (notes 1 and 2)                                       753,178          549,407
                                                        ---------        ---------
                                                          961,663          698,678
CAPITAL ASSETS (notes 1 and 3)
  (net of accumulated amortization of $119,106
     and $82,320 respectively)                            143,261          161,578
                                                        ---------        ---------
                                                        1,104,924          860,256
                                                        =========        =========
                      LIABILITIES

CURRENT
  Bank demand loan (note 4)                                43,507           45,608
  Accounts payable and accrued liabilities                146,540           87,586
  Current portion of government loan payable               17,758            4,000
                                                        ---------        ---------
                                                          207,805          137,194

GOVERNMENT LOAN PAYABLE (note 1)                           63,820           77,578

LOAN PAYABLE - OTHERS (note 5)                             25,333            4,667

FUTURE INCOME TAXES PAYABLE (note 6)                       62,531           74,557
                                                        ---------        ---------
                                                          359,489          293,996
                                                        ---------        ---------
                      SHAREHOLDER'S EQUITY

Common stock, $.001 par value
authorized 50,000,000 shares issued
and outstanding at January 31, 2001
17,683,000 shares and 16,000,000 shares
at January 31, 2000                                        17,683            16,000

ADDITIONAL PAID IN CAPITAL                                623,249           458,881

RETAINED EARNINGS                                         104,503            91,379
                                                        ---------         ---------
                                                          745,435           566,260
                                                        ---------         ---------
                                                        1,104,924           860,256
                                                        =========         =========
</TABLE>

See accompanying notes

Approved on behalf of the board:

________________________Director



<PAGE>    7

                                                                  Exhibit B

                       GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

                 INTERIM CONSOLIDATED STATEMENT OF RETAINED EARNINGS
                                For the period ended
                                    (UNAUDITED)

<TABLE>
<CAPTION>

                                                    US Dollars      US Dollars
                                                    May 1, 2000     May 1, 1999
                                                        to              to
                                                    January 31,     January 31,
                                                       2001             2000
                                                    -----------     -----------
                                                         $                $
<S>                                                 <C>             <C>

Retained earnings - beginning of period

  As previously reported                                101,928          38,929
  Prior period adjustment (note 11)                     (21,890)           -
                                                     ----------       ---------
  As restated                                            80,038          38,929

NET EARNINGS                                             24,465          52,450
                                                     ----------       ---------
RETAINED EARNINGS - END OF PERIOD                       104,503          91,379
                                                     ==========       =========

</TABLE>


See accompanying notes



<PAGE>   8

                                                                   Exhibit C

                     GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

                   INTERIM CONSOLIDATED STATEMENT OF EARNINGS
                             For the period ended
                                 (UNAUDITED)

<TABLE>
<CAPTION>

                                                        US Dollars      US Dollars
                                                        May 1, 2000     May 1, 1999
                                                            to               to
                                                         January 31,     January 31,
                                                            2001            2000
                                                        ------------    ------------
                                                              $              $
<S>                                                     <C>             <C>

REVENUE                                                      135,308         173,167

COST OF SALES                                                 31,055          38,828
                                                          ----------      ----------
                                                             104,253         134,339
                                                          ----------      ----------

EXPENSES
  Travel, promotion and advertising                           47,494          38,510
  Office, telephone and rent                                   9,118          10,431
  Professional fees                                            1,483           4,294
  Interest and bank charges                                    1,744             701
  Amortization of capital assets                               7,899           8,114
                                                          ----------      ----------
                                                              67,738          62,050
                                                          ----------      ----------

Earnings before provision for income taxes                    36,515          72,289

PROVISION FOR INCOME TAXES
  Future income taxes                                         12,050          19,839
                                                          ----------      ----------
NET EARNINGS FOR THE PERIOD                                   24,465          52,450
                                                          ==========      ==========
NET EARNINGS PER SHARE                                           .00             .00
                                                          ==========      ==========
WEIGHTED AVERAGE SHARES OUTSTANDING                       17,683,000      16,000,000
                                                          ==========      ==========

</TABLE>



See accompanying notes



<PAGE>   9

                                                                  Exhibit D

                   GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

                 INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
                              For the period ended
                                  (UNAUDITED)

<TABLE>
<CAPTION>

                                                         US Dollars      US Dollars
                                                         May 1, 2000     May 1, 1999
                                                              to             to
                                                         January 31,     January 31,
                                                             2001            2000
                                                         -----------     -----------
                                                              $               $
<S>                                                      <C>             <C>

CASH FLOWS FROM OPERATING ACTIVITIES
  Net earnings for the period                                 24,465          52,450
  Add (deduct) non-cash items:
    Amortization                                              22,082          26,146
    Future income taxes                                       17,760          15,525
  Net changes in non-cash working capital:
    Accounts receivable                                      (20,939)        (83,523)
    Record masters and preproduction costs                  (136,357)        (95,539)
    Website development costs                                 21,890            -
    Accounts payable and accrued liabilities                  48,139          49,803
    Prior period adjustment (write-off of
      Website Development Costs)                             (21,890)           -
                                                          ----------      ----------
Net cash used in operating activities                        (44,850)        (35,138)
                                                          ----------      ----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of capital assets                                  (3,770)         (2,029)
                                                          ----------      ----------
Net cash used in investing activities                         (3,770)         (2,029)
                                                          ----------      ----------
CASH FLOWS FROM FINANCING ACTIVITIES
  Loan payable - others                                       25,333           4,667
  Decrease in bank demand loan                              (119,668)       (132,252)
  Increase in bank demand loan                               142,955         164,752
                                                          ----------      ----------
Net cash provided by financing activities                     48,620          37,167
                                                          ----------      ----------

INCREASE IN CASH                                                -               -

Cash - beginning of period                                      -               -
                                                          ----------      ----------
CASH - END OF PERIOD                                            -               -
                                                          ==========      ==========

</TABLE>

See accompanying notes


<PAGE>   10

                   GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

              NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                            As at January 31, 2001
                                 (UNAUDITED)


1.	     ACCOUNTING POLICIES
        -------------------

a)	     History and Organization of the Company
        ---------------------------------------

The Company was organized November 19, 1998, under the Canada Business
Corporations Act.


b)	     Principle of the Consolidated Financial Statements
        --------------------------------------------------

The consolidated financial statements include the accounts of:

Grand Entertainment & Music G.E.M. Inc. and its subsidiaries.

All interCompany transactions and accounts have been eliminated in
consolidation.


c)	     Accounts Receivable
        -------------------

Management believes that all accounts receivable as of January 31, 2001 were
fully collectible; therefore, no allowance for doubtful accounts were
recorded.


d)	     Revenue Recognition
        -------------------

Revenue is derived from sale of distribution rights, publishing rights and
equity in production and records sales.  Revenue is recognized as earned
when the records are completed and delivered, when amounts are due from the
exhibitor and when a contract is secured that irrevocably transfers
distribution rights, or publishing rights to a licensee or equity to an
investor, and there is reasonable assurance of collectability of proceeds.


<PAGE>   11


                GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

         NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                        As at January 31, 2001
                             (UNAUDITED)


1.	     ACCOUNTING POLICIES (Cont'd)
        -------------------

e)	     Record Masters and Preproduction Costs
        --------------------------------------

Adaption of Statement of Accounting Standard No. 50
---------------------------------------------------

In November 1981, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 50,  "Financial reporting in
the Record and Music Industry" (SFAS 50).  SFAS 50 accounts for record
masters and preproductions costs as follows:

Record masters represents the unamortized costs of the record  masters which
have been produced by the Company.  Such costs include all production, print
and advertising costs which are expected to be recovered from future
revenues, net of estimated future liabilities related to the product.  The
Company also has interest in record masters that are fully amortized, the
values of which have not been reflected in the consolidated financial
statements.

Amortization is determined based on the ratio of current revenues earned
from the record masters to expected gross future revenues.  Based on
management's estimates of gross future revenues as at January 31, 2001, it
is expected that the record masters will be absorbed principally over the
next ten years.

Record masters are written down to the net recoverable amount if the
investment is greater than the net recoverable amount.  Net recoverable
amount is defined as the total future revenues expected to be earned from
the record masters net of future costs.

Preproduction costs represent expenditures made on projects prior to
production.  Advances or contributions received from third parties to assist
in development are deducted from these expenditures.  Upon commencement of
production, preproduction costs are charged to production.  Preproduction
costs which have not been set for production and are held for more than five
years are ultimately expensed.  Preproduction costs are written off when
determined not to be recoverable.

In managements opinion, record masters and preproduction costs have been
classified as a current assets because management can either sell the
distribution rights for a limited period of time or management can sell over
a short period of time the individual masters.


<PAGE>   12


                  GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

            NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                         As at January 31, 2001
                             (UNAUDITED)

1.	     ACCOUNTING POLICIES (Cont'd)
        -------------------

f)	     Government Loans and Incentives Payable
        ---------------------------------------

The Company has access to several government programs that are designed to
assist record production and distribution in Canada and around the world.
The Company has two such programs in operation and are repayable as follows:

                                                 January 31,     January 31,
                                                    2001            2000
                                                 -----------     -----------
                                                      $               $
Government Loan Payable

- repayable starting December 31, 1998 up to
  December 31, 2007 at 3% of its worldwide
  sales non-interest bearing.                         33,068          33,068

Government Loan Payable
- repayable as follows:
  December 31, 2000 - 20% of the loan
  December 31, 2001 - 25% of the loan
  December 31, 2002 - 25% of the loan
  December 31, 2003 - 30% of the loan
- non-interest bearing                                48,510          48,510
                                                   ---------       ---------
                                                      81,578          81,578
Less:  Current portion                               (17,758)         (4,000)
                                                   ---------       ---------
Long-term portion                                     63,820          77,578
                                                   =========       =========


Capital repayments over the next five years.

                                                 $
                                            -----------
     April 2001                                17,758
     April 2000                                16,127
     April 2003                                17,128
     April 2004                                20,553
     April 2005                                10,012


g)	Capital Assets
        --------------
Capital assets are carried at cost less accumulated amortization.
Amortization is provided primarily using the following method and annual
rates:

Intangibles                      -    Diminishing balance -  7%
Computer hardware and software   -    Diminishing balance - 30%
Furniture and fixtures           -    Diminishing balance - 20%
Production equipment             -    Diminishing balance - 20%
Leasehold improvements           -    Straight-line - 5 years
Rolling stock                    -    Diminishing balance - 30%


<PAGE>   13

                 GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          As at January 31, 2001
                               (UNAUDITED)

1.      ACCOUNTING POLICIES (Cont'd)
        -------------------

h)     	Adoption of Statement of Accounting Standard No. 128
        ----------------------------------------------------

In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128.  "Earnings per Share"
(SFAS 128).  SFAS 128 changes the standards for computing and presenting
earnings per share (EPS) and supersedes Accounting Principles Board Opinion
No. 15, "Earnings per Share."  SFAS 128 replaces the presentation of primary
EPS with a presentation of basic EPS.  It also requires dual presentation of
basic and diluted EPS on the face of the income statement for all entities
with complex capital structures and requires a reconciliation of the
numerator and denominator of the basic EPS computation to the numerator and
denominator the diluted EPS computation. SFAS 128 is effective for financial
statements issued for periods ending after December 15, 1997, including
interim periods.  This Statement requires restatement of all prior-period
EPS data presented.

As it is related to the Company, the principal differences between the
provisions of SFAS 128 and previous authoritative pronouncements are the
exclusion of common stock equivalents in the determination of Basic Earnings
per share and the market price at which common stock equivalents are
calculated in the determination of Diluted Earnings per share.

Basic earnings per common share is computed using the weighted average
number of shares of common stock outstanding for the period.  Diluted
earnings per common share is computed using the weighted average number of
shares of common stock and dilutive common equivalent shares related to
stock options and warrants outstanding during the period.

For the period ended January 31, 2001, primary earnings per share was the
same as basic earnings per share and fully diluted earnings per share was
the same as diluted earnings per share.

i)     	Foreign Exchange
        ----------------

Assets and liabilities of the Company which are denominated in foreign
currencies are translated at exchange rates prevailing at the balance sheet
date.  Revenues and expenses are translated at average rates throughout the
year.

j)	     Use of Estimates
        ----------------

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


<PAGE>   14


                 GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

            NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                          As at January 31, 2001
                               (UNAUDITED)

1.	     ACCOUNTING POLICIES (Cont'd)
        -------------------

k)	     Dividend Policy
        ---------------

The Company has not yet adopted any policy regarding payment of dividends.
No dividends have been paid since inception.


2.	     RECORD MASTERS AND PREPRODUCTION COSTS
        --------------------------------------

                                              January 31,     January 31,
                                                 2001            2000
                                              -----------     -----------
                                                  $               $

Record masters, net of amortization               579,947        390,133

Record masters and preproduction costs in
  progress                                        173,231        159,274
                                                  -------        -------
                                                  753,178        549,407
                                                  =======        =======

3.	     CAPITAL ASSETS
        --------------

<TABLE>
<CAPTION>

                                       January 31, 2001                January 31, 2000
                             Cost        Amortization         Net            Net
                           --------    ----------------     -------    ----------------
                               $               $               $              $
<S>                        <C>         <C>                  <C>        <C>

Rolling stock                 2,056              737          1,319            1,623
Furniture and fixtures       16,381            9,416          6,965            8,777
Computer hardware and
  software                   49,772           40,485          9,287           16,209
Production equipment        177,487           61,236        116,251          123,614
Intangibles                  13,113           3,850           9,263           10,296
Leasehold improvements        3,558           3,382             176            1,059
                           --------        --------        --------         --------
                            262,367         119,106         143,261          161,578
                           ========        ========        ========         ========
</TABLE>


4.	     BANK DEMAND LOAN
        ----------------

The bank demand loan is secured by the personal guarantee of a director and
shareholder and a pledge on the accounts receivable and a lien on the
equipment.

5.	     LOAN PAYABLE - OTHERS
        ---------------------

The loan payable - others is non-interest bearing and has no fixed repayment
terms.

6.     	FUTURE INCOME TAXES PAYABLE
        ---------------------------

Future income taxes payable arise as a result of timing differences occurring
when amortization of record masters and preproduction costs differ from
amortization rates prescribed for income tax purposes.

For the period from May 1, 2000 to January 31, 2001, the amount of future
income taxes payable recorded in the accounts were $12,050.


<PAGE>   15


                  GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

             NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                           As at January 31, 2001
                                 (UNAUDITED)


7.	     STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
        --------------------------------------------

<TABLE>
<CAPTION>
                                                                     Accumulated
                                                     Additional      (Deficit)
                               Common Stock           paid-in         Retained
                            Shares        Amount      Capital         Earnings
                          ----------      ------     ----------      -----------
                                            $           $                 $
<S>                       <C>             <C>        <C>             <C>

November 19, 1998
issued                    16,000,000      16,000        191,289            -

Net earnings, November
19, 1998 to April 30,
1999                           -             -             -              38,929
                          ----------      -------      --------         --------
Balance,
April 30, 1999            16,000,000       16,000       191,289           38,929
                          ----------      -------      --------         --------

February 21, 2000
- issued shares in
  exchange of 100% of
  Grand Entertainment
  & Music G.E.M. Inc.
  (Canada)                 1,683,000        1,683       431,960            -
                          ----------      -------      --------         --------
Balance,
February 21, 2000         17,683,000       17,683       623,249           38,929
Net earnings
  May 1, 1999 to
  April 30, 2000              -              -             -              62,999
                          ----------      -------      --------         --------
Balance,
April 30, 2000            17,683,000       17,683       623,249          101,928

Prior period adjustment
(write off of Website
Development Costs)            -              -             -             (21,890)

Net earnings
  May 1, 2000 to
  January 31, 2001            -              -             -              24,465
                          ----------      -------      --------         --------
Balance,
January 31, 2001          17,683,000       17,683       623,249          104,503
                          ==========      =======      ========         ========

</TABLE>


<PAGE>   16

                 GRAND ENTERTAINMENT & MUSIC G.E.M. INC.

             NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
                           As at January 31, 2001
                               (UNAUDITED)

8.	     COMMITMENTS
        -----------

The Company leases premises under leases expiring in May 2001 and July 2001.
Minimum lease payments over the balance of the leases are as follows:

                                       $
                                    --------
     April 2001                      21,975
     April 2002                       3,970


9.	     FINANCIAL INSTRUMENTS AND RISKS MANAGEMENT
        ------------------------------------------

In conducting its business, the Company used various instruments to manage the
risks arising from fluctuations in exchange rates.  All instruments are used
for risk management purposes only.

a)	     Concentration of Credit Risk
        ----------------------------

The Company's exposure to concentration of credit risk is limited due to the
large number of customers comprising the Company's customer base and their
dispersion across many geographic locations.

b)	     Fair Value of Financial Instruments
        -----------------------------------

The fair value of current monetary assets and liabilities approximates their
carrying values as reported in the consolidated balance sheet due to the
relatively short period to maturity of the instruments.

Due to its floating rate nature, the carrying amount of the bank term loan
approximates its fair value.


10.	    DILUTIVE FACTORS
        ----------------

The Company has neither debt obligations nor senior equity securities in
circulation having conversion privileges into common stock.  There are no
options, warrants, or similar instruments outstanding which could cause an
increase in common stock outstanding.  Furthermore, the Company has not
adopted a stock option  plan for its directors or employees which would cause
an increase in common stock outstanding.


11.	    PRIOR PERIOD ADJUSTMENT
        -----------------------

In accordance with EITF00-2 and APBO No. 20 the Company has changes its
accounting policy with respect to Website Development Costs and is therefore,
writing off the cumulative effect of these costs.


<PAGE>   17


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

INTRODUCTION

The following discussion and analysis includes financial information from,
provides information supplementary and should be read in conjunction with the
Company's Consolidated Financial Statements for the period of May 1, 2000 to
January 31, 2001.

OVERVIEW

The Company was incorporated as Future Projects II Corp. under the laws of
the state of Florida on June 3, 1997. On February 21, 2000, The Company
exchanged 16,000,000 shares of its common stock for 100% of the issued and
outstanding shares of Grand Entertainment and Music (G.E.M.), Inc.  (The
"Original GEM") effectuating a merger and change of control such that the
Original GEM is a wholly-owned subsidiary of the Company. The original GEM
was incorporated on November 19, 1998 in Canada under the Canada Business
Corporations Act. On February 24, 2000, the Company amended its Articles of
Incorporation to officially change its name from Future Projects II Corp. to
Grand Entertainment & Music (G.E.M.) Inc. ("GEM" or the "Company".)

The Company is an independent music producer, which produces, promotes and
markets music recordings (CD's and Cassettes). The Company's copyright
library consists of a repertoire of over 5,000 titles covering the field of
music; children's songs, pop, urban, rock, and classical titles.
Additionally, the Company's studio produces voice-over commercials for radio
and television. Its business operations consist of three wholly owned
subsidiaries: 160662 Canada Inc. (Hitt Records); 2867-0453 Quebec Inc. (Mint
Music International); 3535924 Canada Inc. (Cherry Studio Productions).

RESULTS OF OPERATIONS

The financial results of the Company are for the nine-month period from May
1, 2000 to January 31, 2001.  The following table sets forth certain
financial data for the periods indicated:

<TABLE>
<CAPTION>

Unaudited Financials        Q2 (3months)       % of         Q3 (3 months)      % of       Q1-Q3 (9months)      % of
US Dollars             Aug. 1-Oct. 31, 2000    Sales   Nov. 1-Jan. 31, 2001    Sales   May 1 - Jan 31, 2001    Sales
--------------------   --------------------    -----   --------------------    -----   --------------------    -----
<S>                    <C>                     <C>     <C>                     <C>     <C>                     <C>

Revenues                    $  30,937                       $  90,034                       $  135,308
                            ---------                       ---------                       ----------

Cost of Sales                   6,188          20.0%           22,000          24.4%            31,055         23.0%
General & Administrative        8,397          27.1%           48,314          53.6%            67,738         50.0%
                            ---------          ----         ---------          ----         ----------         ----
Total SGA                      14,585          47.1%           70,314          78.1%            98,793         73.0%
                            ---------          ----         ---------          ----         ----------         ----

Operating Income               16,352          52.9%           19,720          21.9%            36,515         27.0%

</TABLE>


CONSOLIDATED REVENUES

For nine months ended January 31, 2001, the Company's revenues were nominal.
During the current fiscal year the company has been focusing its operations
in developing new product to launch in 2001. The company has also been
negotiating the acquisition of catalogues, corporate financing and its
Internet strategy.

OPERATING COSTS AND EXPENSES

Total costs of sales have been consistent at around 20+% of sales for Q2 and
Q3 and the nine-month reporting period. Sales for Q3 jumped significantly
from $30,937 to $90,034 due to sales of the Company's Children's Series.
Associated with the increased sales were increased General and Administrative
expenses, namely marketing and promotion of the Children's Series, from
$8,397 to $48,314.

OPERATING PROFIT

Profit for Q3 was $19,720 versus $16,352 in Q1. The 20% increase of profit
was attributed primarily to sales of the Children's Series. The Company had
limited product released in Q2 and Q3. New products released in Q3 are being
ramped up for marketing and sales into fiscal 2001-2002.

LIQUIDITY AND CAPITAL RESOURCES

The company at the end of Q3 has little or no cash to fund operations. The
company's operations are financed from cash flow of current sales and loans
from management to the corporation.   The company is continuing its efforts
to arrange loans and equity infusion through private placements, offering
memorandums or secondary offerings.

YEAR 2000 IMPLICATIONS

Based on operations since January 1, 2000, the Company does not expect any
significant impact to its ongoing operations as a result of the year 2000
issues.

RISK FACTORS

See form 10-SB section titled "Risk Factors"


<PAGE>   18



            GRAND ENTERTAINMENT & MUSIC (G.E.M), INC.


                   PART II - OTHER INFORMATION



ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
          --------------------------------------------------

          NONE


ITEM 5. - OTHER INFORMATION
          -----------------

          NONE


ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

          The Registrant has not filed any Current Reports on Form 8-K
          during this reporting period.



<PAGE>    19



                            SIGNATURES


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

                              GRAND ENTERTAINMENT & MUSIC (G.E.M),
                              INC.




Date: March 16, 2001          By:   /s/Fred Berlin
                                 --------------------------------
                                 Fred Berlin, President





<PAGE>    20