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 June 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)

                         (612) 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:  July
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 June 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  10


Part II - Other Information

Item 1 Legal  Proceedings                                         11

Item 2 Changes  in  Securities                                    11

Item 3 Defaults  Upon  Senior  Securities                         11

Item 4 Submission of Matters to a Vote of Security Holders        11

Item 5 Other  Information                                         11

Item 6 Exhibits and Reports on Form 8-K                           11

Signatures                                                        11

                                      2
<PAGE>

Part 1 - Item 1 - Financial Statements

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

                          (Unaudited)

                                             June  30,       June 30,
                                               2001            2000
                             ASSETS
Current Assets
 Cash  on  hand  and  in  bank             $      415        $  6,849

Total  Assets                              $      415        $  6,849



              LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities
 Advances  from  officers                  $    2,000        $      -

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                  17,756          17,756
 Accumulated  deficit                         (31,314)        (22,052)
                                               (1,585)          7,677
 Stock   subscription   receivable                  -            (828)

   Total Shareholders' Equity                   (1,585)         6,849

Total Liabilities and Shareholders' Equity $       415      $   6,849


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
       Six and Three months ended June 30, 2001 and 2000

                          (Unaudited)
<TABLE>
<CAPTION>
                                   Six  months  Six months  Three months  Three months
                                       ended      ended        ended         ended
                                      June 30,   June 30,     June 30,      June 30,
                                       2001        2000         2001          2000
<S>                                <C>          <C>          <C>        <C>
Revenues                           $        -   $        -   $      -   $        -

Expenses
 General and administrative             2,441        2,323        920            -

   Total expenses                       2,441        2,323        920            -

Loss before Income Taxes               (2,441)      (2,323)      (920)           -

Provision for Income Taxes                  -            -          -            -

Net Loss                               (2,441)      (2,323)      (920)           -

Other comprehensive income                  -            -          -            -

Comprehensive  Income               $  (2,441)   $  (2,323)   $  (920)   $       -

Loss per weighted-average share of
 common stock outstanding,
 computed on Net Loss - basic
 and fully diluted                        nil          nil        nil          nil

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.
          Statement of Changes in Shareholders' Equity
            Six months ended June 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 2001reconciliation
 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         -             -             -          (2,323)            -       (2,323)

Balances at
 June  30,  2000             1,207,885    $   12,079    $   17,650    $    (22,052)   $     (828)   $   6,849



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 2001reconciliation
 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         -            -              -          (2,441)            -       (2,441)

Balances at
 June  30,  2001             1,207,885    $  12,079    $    17,650    $    (31,314)   $        -    $  (1,585)
</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
            Six months ended June 30, 2001 and 2000

                          (Unaudited)

                                                   Six months  Six months
                                                      ended      ended
                                                     March 31,  March 31,
                                                       2001       2000
Cash Flows from Operating Activities
 Net Loss                                           $  (2,441)  $ (2,323)
 Adjustments to reconcile net income to net cash
   provided by operating activities
     Decrease   in  accounts   payable                      -          -

Net  cash  provided by (used in) operating activities  (2,441)         -

Cash   Flows  from  Investing  Activities                   -          -

Cash Flows from Financing Activities
 Cash advanced by officer                               2,000          -
 Cash   received  on  common  stock  subscription           -      9,172

Net cash provided by financing activities               2,000      9,172

Increase (Decrease) in Cash and Cash Equivalents         (441)     6,849

Cash   at   beginning   of   period                       856          -

Cash at end of period                               $     415   $  6,849


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  engaged in any negotiations and has not undertaken any steps
to initiate the search for a merger or acquisition candidate.

The  Company  is  fully dependent upon funding from  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/or  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 audited financial  statements
filed  with the U. S. Securities and Exchange Commission  on  its
Annual  Report  on  Form 10-KSB for the year ended  December  31,
2000.   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.


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.

                                      7
<PAGE>

                  Shallbetter Industries, Inc.

           Notes to Financial Statements - Continued


NOTE B - Summary of Significant Accounting Policies - Continued

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  June  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 June 30,   2001  and  2000,  the
   Company   has   no   warrants  and/or   options   issued   and
   outstanding.


NOTE C - Fair Value of Financial Instruments

The  following methods and assumptions were used to estimate  the
fair  value  of  each  class  of  financial  instruments:   Cash,
accounts  receivable and accounts payable, The  carrying  amounts
approximated  fair  value  because the  demand  nature  of  these
instruments.


NOTE D - Advances from officer

To   support   operations,   the   Company's   officer   advanced
approximately  $2,000 to the Company.  These  advances  are  non-
interest bearing and are repayable upon demand.


NOTE E - Common Stock Transactions

On  December  30,  1999, the Company filed Amended  and  Restated
Articles  of  Incorporation with the  State  of  Minnesota.   The
effect of these Articles was to increase the authorized number of
common shares which may be issued from 250,000 at $0.10 par value
to  45,000,000  shares  at  $0.01 par value.   Additionally,  the
Restated  Articles  authorized the issuance of  up  to  5,000,000
shares  of $0.01 par value preferred stock.  The effect of  these
changes is reflected in the accompanying financial statements  as
of the first day of the first period presented.

                                      8
<PAGE>

                  Shallbetter Industries, Inc.

           Notes to Financial Statements - Continued


NOTE E - Common Stock Transactions - Continued

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

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 were received.



       (Remainder of this page left blank intentionally)


                                      9
<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 during either the six or three  month
periods ended June 30, 2001 and 2000, respectively.

General and administrative expenses for the six months ended June
30,   2001  and  2000  were  approximately  $2,441  and   $2,323,
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 $2,441 and  $2,323  for  the
first six months of 2001 and 2000, respectively.

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

At  June  30,  2001, the Company had available cash  and  working
capital  of  $415  and  a  retained deficit  of  $(31,314).   The
available  cash is the result of an advance, made in March  2001,
by  the  Company's officer, Craig Laughlin, which is non-interest
bearing  and  repayable  upon demand.   Management  believes  the
Company has sufficient funds to meet its anticipated needs in the
foreseeable future.

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.
       (Remainder of this page left blank intentionally)

                                      10
<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.

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

                                     11
<PAGE>