UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, DC  20549

                          Form 10-QSB



(Mark one)
      XX        QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

               For the quarterly period ended September 30, 2001

                     TRANSITION REPORT UNDER SECTION 13 OR  15(d)
          OF THE EXCHANGE ACT OF 1934

               For  the transition period from   to


                Commission File Number: 0-31297

                  Shallbetter Industries, Inc.
(Exact name of small business issuer as specified in its charter)

Minnesota                                      41-1961936
(State of incorporation)                 (IRS Employer ID Number)

        11900 Wayzata Blvd., Suite 100, Hopkins MN 55305
            (Address of principal executive offices)

                         (952) 541-1155
                  (Issuer's telephone number)


Check  whether  the issuer (1) filed all reports required  to  be
filed by Section 13 or 15(d) of the Exchange Act during the  past
12  months  (or  for such shorter period that the registrant  was
required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.  YES  X    NO

State  the  number of shares outstanding of each of the  issuer's
classes  of  common  equity  as of the latest  practicable  date:
October 17, 2001: 1,207,885

Transitional Small Business Disclosure Format (check  one):   YES
NO X

<PAGE>
                  Shallbetter Industries, Inc.

      Form 10-QSB for the Quarter ended September 30, 2001

                       Table of Contents


                                                                   Page
Part I - Financial Information

 Item 1  Financial  Statements                                       3

 Item 2  Management's Discussion and Analysis or Plan of Operation  11


Part II - Other Information

 Item 1  Legal  Proceedings                                         12

 Item 2  Changes  in  Securities                                    12

 Item 3  Defaults Upon Senior Securities                            12

 Item 4  Submission of Matters to a Vote of Security  Holders       12

 Item 5  Other  Information                                         12

 Item 6  Exhibits and Reports on Form 8-K                           12


Signatures                                                          12

                                     2
<PAGE>

Part 1 - Item 1 - Financial Statements

                  Shallbetter Industries, Inc.
                         Balance Sheets
                  September 30, 2001 and 2000

                          (Unaudited)

                                          September  30,   September 30,
                                               2001           2000
                             ASSETS
Current Assets
 Cash in bank                             $       11    $     947
                                              ------       ------
Total   Assets                            $       11    $     947
                                              ======       ======


              LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
 Advances from Officer                     $   5,600    $       -
                                              ------       ------
Commitments and Contingencies

Shareholders' Equity
 Preferred stock - $0.01 par value.
  5,000,000 shares authorized;
  none issued and outstanding                       -           -
 Common stock - $0.01 par value.
  45,000,000 shares authorized.
  1,207,885 shares issued and outstanding      12,079      12,079
  Additional paid-in capital                   17,650      17,650
 Accumulated  deficit                         (35,318)    (27,954)
                                              -------      ------
                                               (5,589)      1,775
 Stock subscription receivable                      -        (828)
                                              -------      ------
  Total Shareholders' Equity                   (5,589)        947
                                              -------      ------
Total Liabilities and Shareholders' Equity  $      11    $      -
                                              =======      ======

The  financial information presented herein has been prepared  by
management
without audit by independent certified public accountants.
The  accompanying notes are an integral part of  these  financial
statements.

                                     3
<PAGE>

                  Shallbetter Industries, Inc.
       Statements of Operations and Comprehensive Income
    Nine and Three months ended September 30, 2001 and 2000

                          (Unaudited)
<TABLE>
<CAPTION>
                                  Nine months   Nine months  Three months  Three months
                                      ended        ended         ended         ended
                                  September 30, September 30, September 30, September 30,
                                       2001         2000           2001         2000
<S>                                <C>           <C>           <C>           <C>
Revenues                           $      -      $      -      $      -      $      -
                                     ------        ------        ------         -----
Expenses
 General and administrative           6,445         8,225         4,004         5,902
                                     ------        ------         -----         -----
   Total expenses                     6,445         8,225         4,004         5,902
                                     ------        ------         -----         -----
Loss before Income Taxes             (6,445)       (8,225)       (4,004)       (5,902)

Provision for Income Taxes                -             -             -             -
                                     ------        ------        ------        ------
Net Loss                             (6,445)       (8,225)       (4,004)       (5,902)

Other comprehensive income                -             -             -             -
                                     ------        ------        ------        ------
Comprehensive Income               $ (6,445)     $ (8,225)     $ (4,004)     $ (5,902)
                                     ======        ======        ======        ======
Loss per weighted-average share of
 common stock outstanding,
 computed on Net Loss - basic
 and fully diluted                  $ (0.01)     $ (0.01)          nil        $ (0.01)
                                     ======       ======         =====         ======
Weighted-average number of shares
 of   common   stock  outstanding   1,207,885     1,207,885     1,207,885      1,207,885
                                    =========     =========     =========      =========
</TABLE>

The  financial information presented herein has been prepared  by
management
without audit by independent certified public accountants.
The  accompanying notes are an integral part of  these  financial
statements.

                                     4
<PAGE>


                  Shallbetter Industries, Inc.
         Statements of Changes in Shareholders' Equity
         Nine months ended September 30, 2001 and 2000

                          (Unaudited)

<TABLE>
<CAPTION>
                                                       Additional                   Stock
                                  Common  Stock          paid-in    Accumulated  subscription
                              Shares        Amount       capital      deficit     receivable      Total
<S>                          <C>          <C>          <C>          <C>           <C>           <C>
Balances at
 January 1, 2000,
 as  reported                1,197,285    $  11,973    $  17,756    $  (19,729)   $  (10,000)   $        -

Correction of cumulative
 clerical errors found in
 Fiscal 2001 reconciliation
 of shareholders' listing       10,600         106          (106)            -             -             -
                             ---------      ------        ------       -------       -------
Balances at
 January 1, 2000,
 as restated                 1,207,885      12,079        17,650       (19,729)      (10,000)            -

Collections on stock
 subscription receivable             -           -             -             -         9,172         9,172

Net loss for the period              -           -             -        (8,225)            -        (8,225)
                             ---------      ------        ------       -------       -------
Balances at
 September 30, 2000          1,207,885    $ 12,079    $   17,650    $  (27,954)   $     (828)   $      947
                             =========      ======        ======       =======       =======
Balances at
 January 1, 2001,
 as reported                 1,197,285    $ 11,973     $  17,756    $  (28,873)   $        -    $      856

Correction of cumulative
 clerical errors found in
 Fiscal 2001 reconciliation
 of shareholders' listing       10,600         106          (106)            -             -             -
                             ---------      ------        ------       -------      --------
Balances at
 January 1, 2001,
 as restated                 1,207,885      12,079        17,650       (28,873)            -           856

Net loss for the period              -           -             -        (6,445)            -        (6,445)
                             ---------      ------        ------        ------      --------
Balances at
 September 30, 2001          1,207,885    $ 12,079    $   17,650    $  (35,318)   $        -    $   (5,589)
                             =========      ======        ======        ======      ========
</TABLE>
The  financial information presented herein has been prepared  by
management
without audit by independent certified public accountants.
The  accompanying notes are an integral part of  these  financial
statements.

                                     5
<PAGE>

                  Shallbetter Industries, Inc.
                    Statements of Cash Flows
         Nine months ended September 30, 2001 and 2000

                          (Unaudited)
                                                  Nine months    Nine months
                                                      ended         ended
                                                  September 30,  September 30,
                                                       2001         2000
Cash Flows from Operating Activities
 Net Loss                                            $(6,445)    $ (8,225)
 Adjustments to reconcile net income to net cash
   provided by operating activities
     Decrease in accounts payable                          -            -

Net cash provided by (used in) operating activities    (6,445)      (8,225)

Cash Flows from Investing Activities                        -            -

Cash Flows from Financing Activities
 Cash received common stock subscription                    -        9,172
 Advance from shareholder                               5,600            -

Net cash provided by financing activities               5,600        9,172

Increase (Decrease) in Cash and Cash Equivalents         (845)         947

Cash and cash equivalents at beginning of period          856            -

Cash and cash equivalents at end of period           $     11     $    947


Supplemental Disclosures of Interest and Income Taxes Paid
 Interest paid  during  the  period                  $      -     $      -
 Income taxes  paid  (refunded)                      $      -     $      -

The  financial information presented herein has been prepared  by
management
without audit by independent certified public accountants.
The  accompanying notes are an integral part of  these  financial
statements.

                                     6
<PAGE>
                  Shallbetter Industries, Inc.

                 Notes to Financial Statements


NOTE A - Organization and Description of Business

Shallbetter Industries, Inc. (Company) was initially incorporated
on  September  8, 1968 under the laws of the State of  Minnesota.
From  inception  through 1982, the Company was  involved  in  the
design, production and sale of custom electric power distribution
equipment; including switchgears, panelboards, busducts, high and
low  voltage main entrance cabinets and substations.  The Company
also  designed  and marketed electrical apparatus to  the  mobile
home industry.

During  1982,  the Company ceased all operations, liquidated  all
assets  and settled all outstanding liabilities through a Chapter
7  action  in  the  U. S. Bankruptcy Court..  Subsequent  to  the
settlement  and dismissal of the bankruptcy action , the  Company
has  not  conducted  any business operations  or  maintained  any
assets.   The current business purpose of the Company is to  seek
out and obtain a merger, acquisition or outright sale transaction
whereby the Company's shareholders will benefit.  The Company  is
not  currently engaged in any negotiations and continues to  seek
an appropriate merger or acquisition candidate.

The Company is fully dependent upon its current management and/or
significant shareholders to provide sufficient working capital to
preserve the integrity of the corporate entity.  It is the intent
of   management  and  significant  shareholders  to  provide  the
necessary  working capital necessary to support and preserve  the
integrity of the corporate entity.

During  interim  periods,  the  Company  follows  the  accounting
policies  set forth in its Annual Report on Form 10-KSB  for  the
year  ended  December 31, 2000 as filed with the U. S. Securities
and  Exchange Commission.  The information presented within these
interim  financial  statements may not  include  all  disclosures
required  by  generally accepted accounting  principles  and  the
users  of  financial  information provided  for  interim  periods
should  refer  to the annual financial information and  footnotes
when reviewing the interim financial results presented herein.

In  the opinion of management, the accompanying interim financial
statements, prepared in accordance with the U. S. Securities  and
Exchange Commission's instructions for Form 10-QSB, are unaudited
and  contain all material adjustments, consisting only of  normal
recurring  adjustments necessary to present fairly the  financial
condition,  results of operations and cash flows of  the  Company
for the respective interim periods presented.  The current period
results  of operations are not necessarily indicative of  results
which ultimately will be reported for the full fiscal year ending
December 31, 2001.

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  date of the financial  statements  and  the
reported  amounts of revenues and expenses during  the  reporting
period.  Actual results could differ from those estimates.

                                     7
<PAGE>

                  Shallbetter Industries, Inc.

           Notes to Financial Statements - Continued


NOTE B - Summary of Significant Accounting Policies

1.   Cash and cash equivalents

   The   Company  considers  all  cash  on  hand  and  in  banks,
   including  accounts in book overdraft positions,  certificates
   of   deposit   and   other  highly-liquid   investments   with
   maturities  of  three months or less, when  purchased,  to  be
   cash and cash equivalents.

2.  Income taxes

   With  a  1999 effective change of control of the Company,  all
   net  operating loss carryforwards incurred prior to that  time
   were  negated  in accordance with Section 382 of the  Internal
   Revenue Code.

   At  September  30, 2001 and 2000, the deferred tax  asset  and
   deferred  tax  liability accounts, as recorded when  material,
   are  entirely the result of temporary differences.   Temporary
   differences  represent  differences  in  the  recognition   of
   assets   and  liabilities  for  tax  and  financial  reporting
   purposes,     primarily    accumulated    depreciation     and
   amortization.  Any deferred tax asset existing at these  dates
   was  fully  reserved  due  to  the unpredictability  of  their
   ultimate realization.

3.   Earnings (Loss) per share

   Basic  earnings (loss) per share is computed by  dividing  the
   net income (loss) by the weighted-average number of shares  of
   common   stock   and   common  stock  equivalents   (primarily
   outstanding  options and warrants).  Common stock  equivalents
   represent the dilutive effect of the assumed exercise  of  the
   outstanding  stock  options and warrants, using  the  treasury
   stock  method.   The  calculation of  fully  diluted  earnings
   (loss)  per share assumes the dilutive effect of the  exercise
   of  outstanding options and warrants at either  the  beginning
   of  the  respective period presented or the date of  issuance,
   whichever  is later.  As of September 30, 2001 and  2000,  the
   Company   has   no   warrants  and/or   options   issued   and
   outstanding.


NOTE C - Fair Value of Financial Instruments

The  carrying  amount  of  cash,  accounts  receivable,  accounts
payable and notes payable, as applicable, approximates fair value
due  to  the short term nature of these items and/or the  current
interest rates payable in relation to current market conditions.


NOTE D - Advances from Officer

To  support operations, the Company's chief executive officer has
cumulatively advanced approximately $5,600 to the Company.  These
advances are non-interest bearing and are repayable upon demand.

                                     8
<PAGE>

                  Shallbetter Industries, Inc.

           Notes to Financial Statements - Continued


NOTE E - Income Taxes

The  components  of  income tax (benefit) expense  for  the  nine
months  ended September 30, 2001 and 2000, respectively,  are  as
follows:
                                          September 30,    September 30,
                                               2001            2000
   Federal:
     Current                              $        -      $           -
     Deferred                                      -                  -
                                                   -                  -
   State:
     Current                                       -                  -
     Deferred                                      -                  -
                                                   -                  -
   Total                                  $        -      $           -

As  of  September 30, 2001, the Company has a net operating  loss
carryforward  of  approximately $15,800 to offset future  taxable
income.   Subject to current regulations, this carryforward  will
begin  to expire in 2020. The amount and availability of the  net
operating  loss  carryforwards may be subject to limitations  set
forth  by the Internal Revenue Code.  Factors such as the  number
of shares ultimately issued within a three year look-back period;
whether there is a deemed more than 50 percent change in control;
the  applicable  long-term tax exempt bond  rate;  continuity  of
historical  business; and subsequent income of  the  Company  all
enter into the annual computation of allowable annual utilization
of the carryforwards.

The  Company's  income  tax expense for  the  nine  months  ended
September 30, 2001 and 2000, respectively, are as follows:
                                                  September 30,  September 30,
                                                      2001           2000

Statutory  rate applied to loss before income taxes $   (2,200)   $  (2,800)
Increase (decrease) in income taxes resulting from:
  State income taxes                                         -            -
  Other, including reserve for deferred tax  asset       2,200        2,800

        Income  tax  expense                        $        -    $       -


Temporary   differences,   consisting  primarily   of   statutory
deferrals  of  expenses for organizational  costs  and  statutory
differences in the depreciable lives for property and  equipment,
between the financial statement carrying amounts and tax bases of
assets  and  liabilities  give rise to deferred  tax  assets  and
liabilities as of September 30, 2001 and 2000, respectively:

                                          September 30,  September 30,
                                              2001           2000
Deferred tax assets
 Net operating loss carryforwards           $  5,400     $   2,800
 Less  valuation  allowance                   (5,400)       (2,800)

   Net   Deferred  Tax  Asset               $      -     $       -

                                     9
<PAGE>

                  Shallbetter Industries, Inc.

           Notes to Financial Statements - Continued


NOTE E - Income Taxes - continued

During  the  nine months ended September 30, 2001 and  2000,  the
reserve   for  the  deferred  current  tax  asset  increased   by
approximately $2,600 and $2,800, respectively.


NOTE F - Common Stock Transactions

During  the  first  quarter  of 2001, the  Company  performed  an
extensive  reconciliation of its shareholder list in  conjunction
with  the appointment of a new stock transfer agent.  As a result
of   this  reconciliation  process,  the  Company  noted  various
clerical  errors in its issued and outstanding shares.   The  net
effect of this reconciliation process was to add 10,600 shares to
the  issued and outstanding shares of the Company as of the first
day of the first period presented.

On  December  30, 1999, the Company entered into a $10,000  Stock
Subscription  Agreement  with  an  individual,  who  became   the
Company's  President and Sole Director on December 9,  1999,  for
the  acquisition of 1,000,000 shares of restricted,  unregistered
$0.01  par  value  common stock.  As of December  31,  2000,  all
amounts  due  under  the Stock Subscription  Agreement  had  been
received.



       (Remainder of this page left blank intentionally)

                                     10
<PAGE>

Part I - Item 2

Management's  Discussion and Analysis of Financial Condition  and
Results of Operations

(4)  Caution Regarding Forward-Looking Information

This quarterly report contains certain forward-looking statements
and  information relating to the Company that are  based  on  the
beliefs of the Company or management as well as assumptions  made
by   and  information  currently  available  to  the  Company  or
management.   When used in this document, the words "anticipate,"
"believe,"   "estimate,"  "expect"  and  "intend"   and   similar
expressions, as they relate to the Company or its management, are
intended to identify forward-looking statements.  Such statements
reflect  the current view of the Company regarding future  events
and  are subject to certain risks, uncertainties and assumptions,
including the risks and uncertainties noted.  Should one or  more
of these risks or uncertainties materialize, or should underlying
assumptions  prove incorrect, actual results may vary  materially
from  those described herein as anticipated, believed, estimated,
expected   or   intended.   In  each  instance,   forward-looking
information  should  be considered in light of  the  accompanying
meaningful cautionary statements herein.

(5)  Results of Operations, Liquidity and Capital Resources

The  Company  had  no  revenue for the nine month  periods  ended
September 30, 2001 and 2000, respectively.

General and administrative expenses for the nine and three months
ended  September 30, 2001 and 2000 were approximately $6,445  and
$8,225,  respectively.   These expenses  consisted  primarily  of
legal  and  accounting expenses associated with  maintaining  the
corporate  status  of  the Company and compliance  with  the  SEC
annual and quarterly reporting process.

The  Company  realized a net loss of $6,445 and  $8,225  for  the
first nine months of 2001 and 2000, respectively.

The Company does not expect to generate any meaningful revenue or
incur operating expenses unless and until it acquires an interest
in an operating company.

At  September 30, 2001, the Company had available cash of $11 and
a  deficit  in  working capital of $(5,589)  and  an  accumulated
deficit  of  $(5,589).   The available  cash  is  the  result  of
cumulative working capital advances of approximately $5,600  made
to  the  Company by it's chief executive officer, Craig Laughlin.
These  advances  are non-interest bearing and are repayable  upon
demand.

The  Company is currently fully dependent either future sales  of
securities and/or advances or loans from significant stockholders
or  corporate officers to provide sufficient working  capital  to
preserve the integrity of the corporate entity.

There  is  no assurance that the Company will be able  to  obtain
additional funding through the sales of additional securities or,
that  such  funding,  if available, will  be  obtained  on  terms
favorable to or affordable by the Company.

It  is  the intent of management and significant stockholders  to
provide  sufficient  working capital  necessary  to  support  and
preserve  the integrity of the corporate entity.  However,  there
is  no  legal  obligation  for either management  or  significant
stockholders to provide additional future funding.

The  Company's  need  for capital may change dramatically  if  it
acquires an interest in a business opportunity during the next 12
months.   The Company's current operating plan is to  (i)  handle
the   administrative  and  reporting  requirements  of  a  public
company;  and  (ii)  search for potential  businesses,  products,
technologies  and  companies for acquisition.   At  present,  the
Company  has  no  understandings, commitments or agreements  with
respect  to  the acquisition of any business, product, technology
or  company  and there can be no assurance that the Company  will
identify  any  such  business,  product,  technology  or  company
suitable for acquisition in the future.  Further, there can be no
assurance  that  the Company would be successful in  consummating
any  acquisition on favorable terms or that it will  be  able  to
profitably manage the business, product, technology or company it
acquires.

                                     11
<PAGE>

Part II - Other Information

Item 1 - Legal Proceedings

  None

Item 2 - Changes in Securities

  None

Item 3 - Defaults on Senior Securities

  None

Item 4 - Submission of Matters to a Vote of Security Holders

  The  Company has held no regularly scheduled, called or special
  meetings of shareholders during the reporting period.

Item 5 - Other Information

  None

Item 6 - Exhibits and Reports on Form 8-K

  Exhibits - None
  Reports on Form 8-K - None



                           SIGNATURES

In  accordance  with the requirements of the  Exchange  Act,  the
registrant caused this report to be signed on its behalf  by  the
undersigned, thereunto duly authorized.

                                  Shallbetter Industries, Inc.


October 17, 2001                  /s/ Craig Laughlin.
                                  Craig Laughlin
                                  President and Director

                                     12
<PAGE>