--------------------------------------------------------------------------------

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                  FORM 10-QSB

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

             For the quarterly period ended June 30, 2001

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

                        COMMISSION FILE NO.:  333-43770
                        -------------------------------

                            SLS INTERNATIONAL, INC.
          ------------------------------------------------------
          (Exact name of registrant as specified in its charter)

           Delaware                                           52-2258371
--------------------------------                          -------------------
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                           Identification No.)

                3119 SOUTH SCENIC, SPRINGFIELD, MISSOURI 65807
                ----------------------------------------------
                   (Address of principal executive offices)

                                (417)883-4549
             ----------------------------------------------------
             (registrant's telephone number, including area code)

     Check whether the registrant (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 [ ]

   The number of shares of common stock, par value $.001 per share, outstanding
as of June 30, 2001 was 18,535,528 shares.

--------------------------------------------------------------------------------




<page>






                            SLS INTERNATIONAL, INC.

                             FOR THE QUARTER ENDED

                                 JUNE 30, 2001

                                      INDEX
                                      -----
                                                                         PAGE
                                                                         ----
PART I - FINANCIAL INFORMATION
- ------------------------------

ITEM 1.  FINANCIAL STATEMENTS

Condensed Balance Sheets as of June 30, 2001 and December 31, 2000 ...     3

Condensed Statements of Operations for the three and six months ended
June 30, 2001 and 2000 ...............................................     4-5

Condensed Statements of Cash Flows for the six months ended June 30,
2001 and 2000 ........................................................     6

Notes to Condensed Financial Statements ..............................     7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR RESULTS OF
         OPERATIONS ..................................................     9


PART II - OTHER INFORMATION
- ---------------------------

ITEM 1.  LEGAL PROCEEDINGS ..........................................     11

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS ..................     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 ..........................................................     12







                                      2
<page>


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

ITEM 1.  FINANCIAL STATEMENTS
- -----------------------------



                            SLS International, Inc.
             (formerly known as Sound and Lighting Specialist, Inc)
                            Condensed Balance Sheet

<TABLE>
<CAPTION>
                                                                                       June 30,           December 31,
                                                                                         2001                 2000
                                                                                     -----------          -----------
                                                                                      (unaudited)
<S>                                                                                  <C>                  <C>
Assets
Current assets:
      Cash                                                                           $   234,815          $    17,658
      Accounts receivable                                                                 60,593               15,948
      Inventory                                                                          271,176              268,562
      Prepaid expenses and other current assets                                            3,242               82,410
                                                                                     -----------          -----------

                  Total current assets                                                   569,826              384,578
                                                                                     -----------          -----------

Fixed assets:
      Vehicles                                                                            47,376               47,376
      Equipment                                                                           44,761               36,407
      Leasehold improvements                                                               4,279                3,376
                                                                                     -----------          -----------

                                                                                          96,416               87,159
Less accumulated depreciation                                                             56,376               48,756
                                                                                     -----------          -----------

                  Net fixed assets                                                        40,040               38,403
                                                                                     -----------          -----------

                                                                                     $   609,866          $   422,981
                                                                                     ===========          ===========

Liabilities and Shareholders' Deficit
Current liabilities:
      Current maturities of long-term debt and notes payable                         $   474,843          $   243,300
      Accounts payable                                                                   214,783              308,112
      Due to shareholders                                                                 31,067               27,247
      Deferred revenue                                                                    70,270               70,270
      Accrued liabilities                                                                 41,994               33,049
                                                                                     -----------          -----------

                  Total current liabilities                                              832,957              681,978
                                                                                     -----------          -----------

Long-term debt, less current maturities                                                   12,812              531,680
                                                                                     -----------          -----------

Commitments and contingencies:
Shareholders' deficit:
      Preferred stock, $.001, par; 5,000,000 shares authorized Common stock,
      $.001, par; 75,000,000 shares authorized;
        14,271,528 shares and 18,535,528  issued and
        outstanding at December 31, 2000 and June 30, 2001                                18,536               14,272
      Contributed capital                                                              1,449,264              401,528
      Retained deficit                                                                (1,703,703)          (1,206,477)
                                                                                     -----------          -----------


                  Total shareholders' deficit                                           (235,903)            (790,677)
                                                                                     -----------          -----------

                                                                                     $   609,866          $   422,981
                                                                                     ===========          ===========
</TABLE>


                  See notes to condensed financial statements.

                                       3

<PAGE>


                            SLS International, Inc.
             (formerly known as Sound and Lighting Specialist, Inc)
                       Condensed Statement Of Operations

<TABLE>
<CAPTION>
                                                         For The Three Months Ended
                                                                 June 30,
                                                   -----------------------------------
                                                        2001                  2000
                                                    ------------          ------------
                                                               (unaudited)
<S>                                                 <C>                   <C>
Revenue                                             $     70,775          $     56,549

Cost of sales                                             48,562                29,747
                                                    ------------          ------------

Gross profit                                              22,213                26,802

General and administrative expenses                      302,186               210,179
                                                    ------------          ------------

Loss  from  operations                                  (279,973)             (183,377)

Other income (expense):
      Interest expense                                   (12,678)               (3,753)
      Interest and miscellaneous, net                      1,542                   275
                                                    ------------          ------------

                                                         (11,136)               (3,478)
                                                    ------------          ------------

Loss before income tax                                  (291,109)             (186,855)

Income tax provision                                           0                     0
                                                    ------------          ------------

Net loss                                            $   (291,109)         $   (186,855)
                                                    ============          ============


Basic and diluted earnings per share                $      (0.02)         $      (0.01)
                                                    ============          ============

Weighted average shares outstanding                   17,082,000            13,933,000
                                                    ============          ============
</TABLE>



                  See notes to condensed financial statements.

                                       4

<PAGE>


                            SLS International, Inc.
             (formerly known as Sound and Lighting Specialist, Inc)
                       Condensed Statement Of Operations

<TABLE>
<CAPTION>
                                                          For The Six Months Ended
                                                                June 30,
                                                     ---------------------------------
                                                        2001                 2000
                                                    ------------          ------------
                                                               (unaudited)
<S>                                                 <C>                   <C>
Revenue                                             $    110,523          $    102,970

Cost of sales                                             69,883                65,838
                                                    ------------          ------------

Gross profit                                              40,640                37,132

General and administrative expenses                      512,115               370,158
                                                    ------------          ------------

Loss  from  operations                                  (471,475)             (333,026)

Other income (expense):
                                                         (27,299)               (6,565)
                                                           1,548                 1,840
                                                    ------------          ------------

                                                         (25,751)               (4,725)
                                                    ------------          ------------

Loss before income tax                                  (497,226)             (337,751)

Income tax provision                                           0                     0
                                                    ------------          ------------

Net loss                                            $   (497,226)         $   (337,751)
                                                    ============          ============


Basic and diluted earnings per share                $      (0.03)         $      (0.02)
                                                    ============          ============

Weighted average shares outstanding                   15,677,000            13,846,000
                                                    ============          ============
</TABLE>

                  See notes to condensed financial statements.

                                       5

<PAGE>


                            SLS International, Inc.
             (formerly known as Sound and Lighting Specialist, Inc)
                       Condensed Statement Of Cash Flows

<TABLE>
<CAPTION>
                                                                        For The Six Months Ended
                                                                               June 30,
                                                                  ----------------------------------
                                                                     2001                   2000
                                                                  -----------            -----------
                                                                              (unaudited)
<S>                                                               <C>                    <C>
Operating activities:
      Net loss                                                    $  (497,226)           $  (337,751)
      Adjustments to reconcile net income to cash flows
        from operating activities:
          Depreciation and amortization                                 7,621                  6,840
      Change in assets and liabilities-
          Accounts receivable                                         (44,645)                10,411
          Inventory                                                    (2,614)               (58,920)
          Prepaid expenses and other current assets                    79,168                 (5,045)
          Accounts payable                                            (93,329)                42,602
          Due to shareholders                                           3,820                 (1,804)
          Accrued liabilities                                           8,945                (41,223)
                                                                  -----------            -----------

          Cash used in operating activities                          (538,260)              (384,890)
                                                                  -----------            -----------

Investing activities:
      Additions to fixed assets                                        (9,257)               (18,768)
                                                                  -----------            -----------

          Cash used in investing activities                            (9,257)               (18,768)
                                                                  -----------            -----------

Financing activities:
      Notes payable borrowing                                         135,000                215,861
      Sale of common stock                                          1,052,000                108,300
      Repayments of long-term debt                                   (422,325)               (37,077)
                                                                  -----------            -----------

          Cash provided by financing activities                       764,675                287,084
                                                                  -----------            -----------

(Decrease) increase in cash                                           217,158               (116,574)
Cash, beginning of period                                              17,657                117,647
                                                                  -----------            -----------

Cash, end of period                                               $   234,815            $     1,073
                                                                  ===========            ===========
</TABLE>


See notes to condensed financial statements.

                                       6

<PAGE>

                             SLS INTERNATIONAL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Basis of Presentation
         The accompanying unaudited condensed financial statements at June 30,
         2001 have been prepared in accordance with generally accepted
         accounting principles for interim financial information and with the
         instructions to Form 10-QSB and reflect all adjustments which, in the
         opinion of management, are necessary for a fair presentation of
         financial positions as of June 30, 2001 and results of operations and
         cash flows for the six months ended June 30, 2001. All such adjustments
         are of a normal recurring nature. The results of operations for the
         interim period are not necessarily indicative of the results expected
         for a full year. Certain amounts in the 2000 financial statements have
         been reclassified to conform to the 2001 presentations. The statements
         should be read in conjunction with the financial statements and
         footnotes thereto included in the Company's Post Effective Amendment
         No. 1 to Form SB-2 for the year ended December 31, 2000.

         On July 25, 2000, SLS International, Inc. was organized as a Delaware
         Corporation with authorized shares of 5,000,000 preferred par value
         $.001 and 75,000,000 common par value $.001. The sole shareholder of
         SLS International, Inc. at incorporation was Sound and Lighting
         Specialist, Inc.

         Sound and Lighting Specialist, Inc., in a reverse merger transaction,
         merged into SLS International, Inc. and exchanged one common share of
         SLS International, Inc. for each outstanding share of Sound and
         Lighting Specialist, Inc. SLS International had no operating activity
         prior to the merger. These financial statements include the operation
         of the predecessor, Sound and Lighting Specialist, Inc., when it was
         only operation of the company through the date of the merger. After the
         merger, there was no business activity in Sound and Lighting
         Specialist, Inc.

Note 2 - Commitments and Contingencies

Going Concern
         The accompanying unaudited condensed financial statements at June 30,
         2001 have been prepared in conformity with generally accepted
         accounting principles which contemplate the continuance of the Company
         as a going concern. The Company has suffered losses from operations
         during the six months ended June 30, 2001 and the years ended December
         31 2000, 1999 and 1998. The Company's cash position may be inadequate
         to pay all of the costs associated with the introduction of its new
         loudspeakers. Management intends to use borrowings and security sales
         to mitigate the effects of its cash position, however no assurance can
         be given that debt or equity financing , if and when required, will be
         available. The unaudited condensed financial statements do not include

                                       7
<PAGE>

         any adjustments relating to the recoverability and classification of
         recorded assets and classification of liabilities that might be
         necessary should the Company be unable to continue in existence.


Note 3 - Notes Payable
         During the six months ended June 30, 2001 the Company received $135,000
         in exchange for notes payable. The interest rate on the notes is 7% and
         the maturity date is six months from the date of each note.


Note 4 - Stock sale
         In May, 2001, the Company successfully completed a public offering that
         raised $920,000 net of expenses. Included in prepaid expenses at
         December 31, 2000 was approximately $80,000 in fees related to the
         offering. These expenses offset contributed capital. The number of
         shares sold was 4,000,000. Included with the purchase of the shares was
         a Class A warrant and a Class B warrant. The Class A warrant has a term
         of 6 months and is exercisable at a price of $.50 per share. The Class
         B warrant has a term of 2 years and shall be exercisable at a price of
         $3.00 per share. The warrants are detachable from the common stock but
         are not separable from each other until the Class A warrant is
         exercised.


         In May and June of 2001, 264,000 Class A warrants were exercised for
         264,000 shares of common stock for a total of $132,000. 3,736,000 Class
         A warrants are outstanding as of June 30, 2001. No Class B warrants
         have been exercised as of June 30, 2001.

                                       8

<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
         ---------------------------------------------------------

The following discussion and analysis should be read in conjunction with the
company's financial statements and notes thereto contained elsewhere in this
filing.

         OVERVIEW

         SLS International was formed on July 25, 2000 and had no previous
operations. On the same date its parent, Sound & Lighting Specialists, Inc, a
Missouri corporation, was merged into SLS International, Inc. All of the
financial information prior to the merger was that of Sound and Lighting
Specialists, Inc. After the merger, all of the operating activity is reported by
SLS International, Inc. After effectiveness of the merger, Sound and Lighting
Specialist, Inc. ceased to exist as a separate corporate entity.

         In June 1999, due to the favorable acceptance by its customers of the
loudspeaker systems that the company had designed, management made the decision
to cease marketing, selling and installing sound and lighting systems directly
on a retail basis and began focusing all efforts toward being a loudspeaker
manufacturer only and selling to dealers and contractors on a wholesale basis.

         In June of 2000, dealerships and distributors began signing on to sell
SLS' professional line of products and products began shipping. However, most of
the professional line required new ribbon drivers which SLS was still in the
process of developing. These products were not completed and implemented into
the product line until 2001. In September of 2000, the company introduced its
home theatre systems and sales for those systems began immediately. The company
began marketing efforts to establish dealerships and dealers in the United
States and in some foreign countries.

         The company's operations are primarily from the sale of loudspeakers
which they produce and sell through their dealer network. The speakers are
recognized within the industry as a high quality product. Earnings are affected
by general economic and competitive conditions.

         RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2001

         Sales for the first and second quarter totaled $110,523 compared to
$102,970 in 2000. This total was comprised from the sales of the companies new
loudspeaker systems and only included products from the Home Theatre Line and
the S8R Studio Monitors from the Professional Line. Sales of the complete
Professional line that include the companies New Ribbon Drivers will begin in
the third quarter of 2001. Sales in 2000 included some rental income and the
remainder of installations that were completed that had been previously
scheduled before the company began the transition to 100% manufacturing.


                                      9
<PAGE>


         General and Administrative expenses rose to $512,115 for the six months
ended June 30, 2001 compared to $370,158 for the six months ended June 30, 2000.
This increase was attributed to the addition of Igor Levitsky as an employee in
charge of Transducer Development, Ed Moist as Controller of Financial Operations
and due to additional trade show participation, professional fees and expenses
to complete the IPO.

         Interest expense was $27,299 in 2001 compared to $6,565 in 2000 because
of additional borrowings and notes payable.

         The net loss for the six months was $497,226 in 2001, an increase of
$159,475 from the loss of $337,751 in 2000.

         LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2001 the current liabilities exceed current assets by
$263,131 primarily due to notes payable being due in March 2002. The total
liabilities exceeded total assets by $235,903 as compared to $996,798 in June
2000. The company closed a stock offering on May 4, 2001 which provided $920,000
to the company net of expenses. In conjunction with the offering there are
outstanding Class A warrants to purchase 4,000,000 shares of the companies stock
at a price of $.50 per share and these warrants will expire in November 4, 2001
as of June 30, 2001 warrants have been exercise. The company expects these
warrants to be exercised before November 4, 2001 due to the fact that the open
market has been trading the companies stock for well above the $.50 warrant
price since the shares began trading on June 19, 2001. The company has produced
inventory of $271,176 and has in place many new dealers in the US as well as
distributors in France, England, Japan, Korea and Australia.

         There was additional borrowings in the six months of $135,000. These
notes have an interest of 7% and are due six months from the date the borrowings
were made.


         FORWARD LOOKING INFORMATION

         This quarterly report on Form 10-QSB contains forward-looking
statements made pursuant to the safe harbor provisions of the Securities
Litigation Reform Act of 1995. These forward-looking statements are based
largely on the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control, including, but
not limited to, economic, competitive and other factors affecting the company's
operations, markets, products and services, expansion strategies and other
factors discussed elsewhere in this report and the documents filed by the
company with the Securities and Exchange Commission. Actual results could differ
materially from these forward-looking statements. In light of these risks and
uncertainties, there can be no assurance that the forward-looking information
contained in this report will in fact prove accurate. The company does not
undertake any obligation to revise these forward-looking statements to reflect
future events or circumstances.


                                       10
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         See "Other Information" below.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.  OTHER INFORMATION

         Reference is made to Post-Effective Amendment No. 1 to Registration
Statement on Form SB-2 at "Plan of Distribution" and Exhibit 99(iii), which are
incorporated herein by reference.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  EXHIBITS - None

         (b)  REPORTS ON FORM 8-K - None


                                       11
<page>

                                   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.


SLS INTERNATIONAL, INC.
    (Registrant)


/s/ John M. Gott                                  August 14, 2001
-----------------------                            ------------
John M. Gott                                          Date
President, Chief Executive Officer,
Chief Financial Officer, Director


/s/ Richard L. Norton                             August 14, 2001
----------------------                             ------------
Richard L. Norton                                     Date
Vice President, Principal Operating
Officer

                                       12