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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-QSB

Quarterly Report Under Section 13 or 15 (d) of
Securities Exchange Act of 1934

For Period ended June 30, 2001
Commission File Number 0-31237

KEYSTONE VENTURES, INC.

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(Exact name of registrant as specified in its charter)


|                         |  |                                     
|------------------------ |  | ------------------------------------
|NEVADA                   |  | 88-0455940                          
|                         |  |                                     
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)

|                                         |            |  |  | 
|---------------------------------------- | ---------- |  |  | 
|1605 MIRAGE COURT, EL CAJON CA           | 92019     
|                                        
|(Address of Principal Executive Offices) | (Zip Code)

(619) 692-2438

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(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 (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   [   ]
|--------- | ----------

Indicate the number of shares outstanding of each of the issuers classes of
common stock at the latest practicable date.

As of June 30, 2001, the registrant had 11,775,000 shares of common stock,
$.001 par value, issued and outstanding.





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TABLE OF CONTENTS



|                             |  |                   |  |  |  |  |  | 
|---------------------------- |  | ----------------- |  |  |  |  |  | 
|                             |  | BALANCE SHEETS   
|                             |  | INCOME STATEMENTS
|                             |  | NOTES            
|PART I FINANCIAL INFORMATION
|PART II OTHER INFORMATION   
|SIGNATURES                  



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KEYSTONE VENTURES, INC.
BALANCE SHEETS

ASSETS

|                                     |  |                                                |                                                                                 |  |             |  |         |  |         |  | 
|------------------------------------ |  | ---------------------------------------------- | ------------------------------------------------------------------------------- |  | ----------- |  | ------- |  | ------- |  | 
|                                     |  |                                                |                                                                                 |  | JUNE 30     |  | SEPT 30
|                                     |  |                                                |                                                                                 |  | 2001        |  | 2000   
|                                     |  |                                                |                                                                                 |  |             |  |        
|                                     |  |                                                |                                                                                 |  | (Unaudited) |  |         |  |        
|CURRENT ASSETS                       |  |                                                |                                                                                 |  |             |  |         | 
|                                    
|                                    
|                                    
|                                    
|                                     |  | CASH (on hand & in the bank)                   |                                                                                 |  | 1,204       |  |         |  | 1,589   | 
|                                     |  |                                                |                                                                                 |  |             |  |         |  |        
|TOTAL CURRENT ASSETS                 |  |                                                | 1,204                                                                           |  |             |  | 1,589   | 
|                                     |  |                                                |                                                                                 |  |             |  |         |  |        
|TOTAL ASSETS                         |  |                                                | 1,204                                                                           |  |             |  | 1,589   | 
|                                     |  |                                                |                                                                                 |  |             |  |         |  |        
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|LIABILITIES AND STOCKHOLDERS EQUITY
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|                                    
|CURRENT LIABILITIES                  |  |                                                | 0                                                                               |  |             |  | 0       | 
|                                     |  |                                                |                                                                                 |  |             |  |         |  |        
|TOTAL CURRENT LIABILITIES            |  |                                                | 0                                                                               |  |             |  | 0       | 
|                                     |  |                                                |                                                                                 |  |             |  |         |  |        
|TOTAL LIABILITIES                    |  |                                                | 0                                                                               |  |             |  | 0       | 
|                                    
|                                    
|                                    
|                                    
|STOCKHOLDERS EQUITY                 |  |                                                |                                                                                 |  |             |  |         | 
|                                    
|                                    
|                                    
|                                    
|                                     |  | COMMON STOCK                                   |                                                                                 |  | 11,775      |  |         |  | 11,775  | 
|                                    
|                                    
|                                    
|                                    
|                                     |  |                                                | Par Value $0.001, 50,000,000 shares
authorized, 11,775,000 issued &
outstanding |  |             |  |         |  |         |  | 
|                                    
|                                    
|                                    
|                                    
|                                     |  | PAID IN CAPITAL                                |                                                                                 |  | 3,925       |  |         |  | 3,925   | 
|                                    
|                                    
|                                    
|                                    
|                                     |  | (DEFICIT) ACCUMULATED DURING DEVELOPMENT STAGE |                                                                                 |  | -14,496     |  |         |  | -14,111 | 
|                                    
|                                    
|                                    
|                                    
|                                     |  |                                                |                                                                                 |  |             |  |         |  |        
|TOTAL STOCKHOLDERS EQUITY           |  |                                                | 1,204                                                                           |  |             |  | 1,589   | 
|                                     |  |                                                |                                                                                 |  |             |  |         |  |        
|TOTAL LIAB & STOCKHOLDERS EQUITY    |  |                                                | 1,204                                                                           |  |             |  | 1,589   | 
|                                     |  |                                                |                                                                                 |  |             |  |         |  |        

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





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KEYSTONE VENTURES, INC.
INCOME STATEMENTS
(Unaudited)

|                                                     |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  |             |       | 
|---------------------------------------------------- | --------------------------------- |  | -------------- | --- | -------------- |  | -------------- | --- | -------------- |  | ---------- | --- |  |  | ---------- | ---- |  |  | ----------- | ----- | 
|                                                     |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  | 3/10/1999  
|                                                     |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  | (Inception)
|                                                     |                                   |  | 3 Months Ended |     | 3 Months Ended |  | 9 Months Ended |     | 9 Months Ended |  | to        
|                                                     |                                   |  | 6/30/01        |     | 6/30/00        |  | 6/30/01        |     | 6/30/00        |  | 6/30/01   
|                                                     |                                   |  |                |     |                |  |                |     |                |  |           
|REVENUE                                              |                                   |  | 0              |     |                |  | 0              |     |                |  | 0          |     |  |  | 0          |      |  |  | 0           |      
|                                                     |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  |             |      
|TOTAL REVENUE                                        |                                   |  | 0              |     |                |  | 0              |     |                |  | 0          |     |  |  | 0          |      |  |  | 0           |      
|                                                     |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  |             |      
|GROSS PROFIT                                         |                                   |  | 0              |     |                |  | 0              |     |                |  | 0          |     |  |  | 0          |      |  |  | 0           |      
|                                                    
|                                                    
|                                                    
|                                                    
|OPERATING EXPENSES                                   |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  |             |      
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | MANAGEMENT FEES                   |  |                | 0   |                |  |                | 0   |                |  |            | 0   |  |  |            | 0    |  |  |             | 10000 | 
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | GENERAL, SELLING & ADMINISTRATIVE |  |                | 113 |                |  |                | 319 |                |  |            | 384 |  |  |            | 4111 |  |  |             | 4496  | 
|                                                     |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  |             |      
|TOTAL OPERATING EXPENSES                             |                                   |  | 113            |     |                |  | 319            |     |                |  | 384        |     |  |  | 4111       |      |  |  | 14496       |      
|                                                     |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  |             |      
|                                                     |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  |             |      
|NET (LOSS)                                           |                                   |  | -113           |     |                |  | -319           |     |                |  | -384       |     |  |  | -4111      |      |  |  | -14496      |      
|                                                     |                                   |  |                |     |                |  |                |     |                |  |            |     |  |  |            |      |  |  |             |      
|NET LOSS PER SHARE                                   |                                   |  | 0.0000         |     |                |  | 0.0000         |     |                |  | 0.0000     |     |  |  | 0.0000     |      |  |  | 0.0000      |      
|                                                    
|                                                    
|                                                    
|                                                    
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |                                   |  | 11,775,000     |     |                |  | 11,775,000     |     |                |  | 11,775,000 |     |  |  | 11,775,000 |      |  |  | 11,775,000  |      

STATEMENT OF CASH FLOWS

|                                                                       |                    |  |          |      |          |  |             |       |  |  |           |        | 
|---------------------------------------------------------------------- | ------------------ |  | -------- | ---- | -------- |  | ----------- | ----- |  |  | --------- | ------ | 
|                                                                       |                    |  |          |      |          |  |             |       |  |  | 3/10/1999
|                                                                       |                    |  | 9 Months |      | 9 Months |  | (Inception)
|                                                                       |                    |  | Ended    |      | Ended    |  | To         
|                                                                       |                    |  | 6/30/01  |      | 6/30/00  |  | 6/30/2001  
|                                                                       |                    |  |          |      |          |  |            
|CASH FLOWS FROM OPERATING ACTIVITIES                                   |                    |  |          |      |          |  |             |       |  |  |           |       
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | NET LOSS           |  |          | -384 |          |  |             | -4111 |  |  |           | -14496 | 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|ADJ TO RECONCILE NET LOSS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES |                    |  |          |      |          |  |             |       |  |  |           |       
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | ISSUE COMMON STOCK |  |          | 0    |          |  |             | 0     |  |  |           | 10000  | 
|                                                                       |                    |  |          |      |          |  |             |       |  |  |           |        | 
|NET CASH USED IN OPERATING ACTIVITIES                                  |                    |  | -384     |      |          |  | -4111       |       |  |  | -4496     |       
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|CASH FLOWS FROM INVESTING ACTIVITIES                                   |                    |  | 0        |      |          |  | 0           |       |  |  | 0         |       
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|CASH FLOWS FROM FINANCING ACTIVITIES                                   |                    |  | 0        |      |          |  | 0           |       |  |  | 5700      |       
|                                                                       |                    |  |          |      |          |  |             |       |  |  |           |        | 
|NET INCREASE (DECREASE)                                                |                    |  | -384     |      |          |  | -4111       |       |  |  | 1204      |       
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|CASH BEGINNING OF PERIOD                                               |                    |  | 1589     |      |          |  | 5700        |       |  |  | 0         |       
|                                                                       |                    |  |          |      |          |  |             |       |  |  |           |        | 
|CASH END OF PERIOD                                                     |                    |  | 1204     |      |          |  | 1589        |       |  |  | 1204      |       

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





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KEYSTONE VENTURES, INC.
(a Development Stage Company)NOTES

Note 1. Basis of Presentation

The consolidated interim financial statements included herein, presented in
accordance with United States generally accepted accounting principles and
stated in US dollars, have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosure normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed and omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management are necessary for fair
presentation of the information contained therein. It is suggested that these
consolidated interim financial statements be read in conjunction with the
financial statements of the Company for the year ended September 30, 2000 and
notes thereto included in the Companys 10-KSB annual report. The Company
follows the same accounting policies in the preparation of interim reports.

Results of operations for the interim periods are not indicative of annual
results.

Note 2. Going concern

These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business. As of June 30, 2001 the Company
has not recognized revenue to date and has accumulated operating losses of
approximately $14,495 since inception. The Companys ability to continue as a
going concern is contingent upon the successful completion of additional
financing arrangements and its ability to achieve and maintain profitable
operations. Management plans to raise equity capital to finance the operating
and capital requirements of the Company. Amounts raised will be used to
further development of the Companys products, to provide financing for
marketing and promotion, to secure additional property and equipment, and for
other working capital purposes. While the Company is expending its best
efforts to achieve the above plans, there is no assurance that any such
activity will generate funds that will be available for operations.

These conditions raise substantial doubt about the Companys ability to
continue as a going concern. These financial statements do not include any
adjustments that might arise from this uncertainty.

Note 3. Related party transactions

The Company does not lease or rent any property. Office services are provided
without charge by a director. Such costs are immaterial to the financial
statements and, accordingly, have not been reflected
therein. The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.





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PART I FINANCIAL INFORMATION

Managements Plan of Operations

Keystones current cash balance is $1,204. Until approximately November of
2001, we believe our small cash balance is sufficient to fund minimum levels of
operations. In order to achieve our business plan goals, we will need to raise
capital through the sale of equity securities. We are a development stage
company and have generated no revenue to date. We have sold $5,700 in equity
securities to pay for our prior minimum level of operations. We have received
a going concern opinion on our financial statements that raises substantial
doubt as to our ability to continue as a going concern.

As of the date of this filing, we have taken the following steps: developed our
business plan, registered our Internet domain name, setup a preliminary one
page Internet web site, signed a licensing agreement for our software product,
applied for and received a copyright for our software, and made our companys
business and financial information available to the public through filings with
the Securities and Exchange Commission subject to disclosure rule of Regulation
S-B. We are now in the process of registering our securities with the
Securities and Exchange Commission. We believe we will be able to complete
this registration process by September 2001. We then intend to obtain a
listing for public trading of our stock on the Over the Counter Electronic
Bulletin Board. We believe we will be able to complete that process by
November 2001. We then intend to seek capital of $4,000,000 through the sale
of common stock in a private placement. We believe we will be able to raise
capital of $4,000,000 by May 2002. We then intend to hire two software
programmers at a cost of $75,000, hire one marketing manager at a salary of
$60,000, hire two office employees at a cost of $40,000, spend $500,000 for
advertising, and $100,000 for rent and other operating expenses. By December
2002, we intend to complete all final testing of our software at a cost of
$100,000, expand our web site at a cost of $40,000, and purchase computers,
furniture, and equipment at a cost of $100,000. We plan to begin selling our
computer firewall software product in December 2002. All of our future
business plan steps represent managements goals, not certainties. We intend
to rely upon our managements business skills, contacts in the software field,
and knowledge of protection software in order to achieve our business plan
goals.

We will only be able to continue to advance our business plan if we receive
capital funding through the sale of equity securities. After raising capital,
we intend to hire employees, rent commercial space in El Cajon, purchase
equipment, and begin marketing our firewall protection software. We intend to
use our equity capital to fund the business plan during the next twelve months
as cash flow from sales is not estimated to begin until year two of our
business plan. We will face considerable risk in each of our business plan
steps, such as difficulty of hiring competent personnel within our budget,
longer than anticipated lead time necessary to sell and deliver the firewall
protection software to customers, and a shortfall of funding due to our
inability to raise capital in the equity securities market. If no funding is
received during the next twelve months, we will be forced to rely on existing
cash in the bank and funds loaned by the directors and officers. Keystones officers and directors have
no formal commitments or arrangements to advance or loan funds to Keystone.
In such a restricted cash flow scenario, we would be unable to complete our
business plan steps, and would, instead, delay all cash intensive activities.
Without necessary cash flow, Keystone may be dormant during the next twelve





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months, or until such time as necessary funds could be raised in the equity
securities market.

We have no operating history, no material current operations, and no profit.
While we believe we have made good faith estimates of Keystones ability to
secure additional capital, there is no guarantee that we will receive
sufficient funding to implement any future business plan steps.







PART II OTHER INFORMATION

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|ITEMS 2-4: |  | Not applicable                                 |  | 
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|ITEM 5:    |  | Information required in lieu of Form 8-K: None |  | 
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|ITEM 6:    |  | Exhibits and Reports on 8-K:                   |  | 



| |                                                                     
| | --------------------------------------------------------------------
| | a) Form 8-K reporting Change of Certifying Accountant filed 3/27/01.







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.



|                        |  |                                      
|----------------------- |  | -------------------------------------
|Keystone Ventures, Inc. |  |                                      
|                        |  |                                      
|                        |  |                                      
|Dated: July 25, 2001    |  | /s/ Bruce Johnson                    
|                        |  |                                      
|                        |  | Bruce Johnson                        
|                        |  | President and Chief Executive Officer