SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[X]      Quarterly  Report Under Section 13 or 15(d) of the Securities  Exchange
         Act of 1934

                        For Quarter Ended: March 31, 2001

                                       OR

[]       Transition  Report  Pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934

                          Commission File No.000-31355

                            GALAXY SPECIALTIES, INC.
             (Exact name of registrant as specified in its charter)

        Nevada                                          81-0438093
(State of incorporation)                   (I.R.S. Employer  Identification No.)


                          369 East 900 South, Suite 149
                           Salt Lake City, Utah 84111
                                 (801) 323-2395
              (Address and telephone number of principal executive
                    offices and principal place of business)



         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 [ ]

         As of April 18, 2001, the  Registrant had a total of 17,000,000  shares
of common stock issued and outstanding.



                                        1

<PAGE>



                          PART I: FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS



                                        2

<PAGE>



                            GALAXY SPECIALTIES, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS




<TABLE>
<CAPTION>
                                                                               March 31,            June 30,
                                                                                  2001                2000
                                                                           ------------------  -----------------
         ASSETS                                                                (Unaudited)          (Audited)
         ------
CURRENT ASSETS
<S>                                                                        <C>                 <C>
   Cash in bank                                                            $                0  $               0
                                                                           ------------------  -----------------

                                                                           $                0  $               0
                                                                           ==================  =================

     LIABILITIES & EQUITY (DEFICIT)
CURRENT LIABILITIES
   Accounts payable - related party (Note 4)                               $           28,000  $          28,000
                                                                           ------------------  -----------------

                                                TOTAL CURRENT LIABILITIES              28,000             28,000

STOCKHOLDERS' EQUITY (DEFICIT)
     Common Stock $.001 par value:
     Authorized - 20,000,000 shares
     Issued and outstanding 17,000,000 shares                                          17,000             17,000
     Deficit accumulated during the development stage                                 (45,000)           (45,000)
                                                                           ------------------  -----------------

                                     TOTAL STOCKHOLDERS' EQUITY (DEFICIT)             (28,000)           (28,000)
                                                                           ------------------  -----------------

                                                                           $                0  $               0
                                                                           ==================  =================
</TABLE>

See Notes to Financial Statements.

                                        3

<PAGE>



                            GALAXY SPECIALTIES, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                      3/7/86
                                           Three Months Ended                       Nine Months Ended                (Date of
                                                March 31,                               March 31,                  inception) to
                                        2001                2000                2001               2000              3/31/2001
                                 ------------------  ------------------  -----------------   -----------------  ------------------
<S>                              <C>                 <C>                 <C>                 <C>                <C>
Net sales                        $                0  $                0  $               0   $               0  $                0
Cost of sales                                     0                   0                  0                   0                   0
                                 ------------------  ------------------  -----------------   -----------------  ------------------

                GROSS PROFIT                      0                   0                  0                   0                   0

General & administrative
   expenses                                       0                   0                  0                   0              45,000
                                 ------------------  ------------------  -----------------   -----------------  ------------------

                    NET LOSS     $                0  $                0  $               0   $               0  $          (45,000)
                                 ==================  ==================  =================   =================  ==================

BASIC AND DILUTED
   (LOSS) PER COMMON
   SHARE
Net income (loss) per
   weighted average share        $            .000   $           (.000)  $            .000   $           (.000)
                                 ==================  ==================  =================   =================

Weighted average number of
   common shares used to
   compute net income (loss)
   per weighted  average share           17,000,000          17,000,000         17,000,000          17,000,000
                                 ==================  ==================  =================   =================
</TABLE>



See Notes to Financial Statements.

                                        4

<PAGE>



                            GALAXY SPECIALTIES, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                      3/7/86
                                           Three Months Ended                       Nine Months Ended                (Date of
                                                March 31,                               March 31,                  inception) to
                                        2001                2000                2001               2000              3/31/2001
                                 ------------------  ------------------  -----------------   -----------------  ------------------
OPERATING ACTIVITIES
<S>                              <C>                 <C>                 <C>                 <C>                <C>
Net income (loss)                $                0  $                0  $               0   $               0  $          (45,000)
Adjustments to reconcile net
   income (loss) to cash used
   by operating activities:
     Amortization                                 0                   0                  0                   0              17,000
     Accounts payable
       related party                              0                   0                  0                   0              28,000
                                 ------------------  ------------------  -----------------   -----------------  ------------------

               NET CASH USED BY
           OPERATING ACTIVITIES                   0                   0                  0                   0                   0

INVESTING ACTIVITIES
Organization costs                                0                   0                  0                   0             (17,000)
                                 ------------------  ------------------  -----------------   -----------------  ------------------

           NET CASH REQUIRED BY
           INVESTING ACTIVITIES                   0                   0                  0                   0             (17,000)

FINANCING ACTIVITIES
Proceeds from sale of
   common stock                                   0                   0                  0                   0              17,000
                                 ------------------  ------------------  -----------------   -----------------  ------------------

           NET CASH PROVIDED BY
           FINANCING ACTIVITIES                   0                   0                  0                   0              17,000
                                 ------------------  ------------------  -----------------   -----------------  ------------------

           INCREASE IN CASH AND
               CASH EQUIVALENTS                   0                   0                  0                   0                   0

Cash and cash equivalents
   at beginning of period                         0                   0                  0                   0                   0
                                 ------------------  ------------------  -----------------   -----------------  ------------------

                    CASH & CASH
                 EQUIVALENTS AT
                  END OF PERIOD  $                0  $                0  $               0   $               0  $                0
                                 ==================  ==================  =================   =================  ==================

</TABLE>



See Notes to Financial Statements.

                                        5

<PAGE>



                            GALAXY SPECIALTIES, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 2001


NOTE 1:       SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

         a.   Basis of Presentation

              The  accompanying  financial  statements  have  been  prepared  in
              accordance with generally accepted accounting  principles ("GAAP")
              for  interim  financial  information.  Accordingly,  they  do  not
              include all of the information and footnotes required by generally
              accepted auditing  principles for complete  financial  statements.
              The unaudited financial statements should,  therefore,  be read in
              conjunction with the financial statements and notes thereto in the
              Report on Form  10-SB12G for the year ended June 30, 2000.  In the
              opinion of management,  all adjustments  (consisting of normal and
              recurring   adjustments)   considered   necessary   for   a   fair
              presentation,  have been  included.  The results of operations for
              the nine month  period  ended March 31,  2001 are not  necessarily
              indicative  of the  results  that may be  expected  for the entire
              fiscal year.

         b.   Organization & Consolidation Policy

              Galaxy Specialties,  Inc. (the Company), a Nevada corporation, was
              incorporated  on May 22, 2000. On June 5, 2000, the Company merged
              with  Hystar  Aerospace  Marketing  Corporation  of  Montana  Inc.
              (Hystar). The Company is the surviving corporation.

              Hystar Aerospace Marketing Corporation of Montana was incorporated
              March 7, 1986 to lease,  sell, and market airships and the Burkett
              Mill, a waste milling device,  which rights were acquired from VIP
              Worldnet, Inc., initially the only shareholder.  The technology to
              further  develop the  airship  and the mill by the parent  company
              proved to be prohibitive, and shortly after the acquisition of the
              marketing rights further activity ceased. Hystar has been inactive
              since that date.

              The merger was recorded  under the pooling of interests  method of
              accounting.  Each share of the Company remained outstanding as one
              fully  paid  and  non-assessable  share  of  capital  stock of the
              surviving corporation.

              The  accompanying   financial  statements  present  the  financial
              condition  and results of  operations of Hystar from its inception
              through the merger date and of the surviving entity,  the Company,
              as of the merger date.

         c.   Recognition of Revenue

              The Company  recognizes income and expense on the accrual basis of
              accounting.

         d.   Net Loss Per Common Share

              Basic and  diluted  loss per common  share is computed by dividing
              net loss available to common  shareholders by the weighted average
              number of common shares outstanding during the periods presented.

         e.   Cash and Cash Equivalents

              The  Company   considers  all  highly  liquid   investments   with
              maturities of three months or less to be cash equivalents.


                                        6

<PAGE>



                            GALAXY SPECIALTIES, INC.
                          (A Development Stage Company)
                    NOTES TO FINANCIAL STATEMENTS (continued)
                                 March 31, 2001


NOTE 1:       SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued)

         f.   Provision for Income Taxes

              The Company  records the income tax effect of  transactions in the
              same year that the  transactions  enter into the  determination of
              income, regardless of when the transactions are recognized for tax
              purposes. Tax credits are recorded in the year realized. Since the
              Company has not yet realized income as of the date of this report,
              no provision for income taxes has been made.

              In  February,  1992,  the  Financial  Accounting  Standards  Board
              adopted  Statement  of  Financial  Accounting  Standards  No. 109,
              Accounting for Income Taxes,  which supersedes  substantially  all
              existing authoritative  literature for accounting for income taxes
              and  requires  deferred tax balances to be adjusted to reflect the
              tax rates in effect  when those  amounts  are  expected  to become
              payable or refundable.  The Statement was applied in the Company's
              financial statements for the fiscal year commencing July 1, 1992.

              No  provision  for  income  taxes  have been  recorded  due to net
              operating loss carryforwards  totaling  approximately $45,000 that
              will  be  offset  against  future   taxable   income.   These  NOL
              carryforwards begin to expire in the year 2001. No tax benefit has
              been  reported  in the  financial  statements  because the Company
              believes there is a 50% or greater chance the  carryforwards  will
              expire unused.

         g.   Use of Estimates

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

         h.   Dividend Policy

              The Company has not yet  adopted any policy  regarding  payment of
              dividends.

         i.   Organization Costs

              The  Company  amortized  its  organization  costs over a five year
              period.

NOTE 2:       GOING CONCERN

         The accompanying  financial statements have been prepared assuming that
         the Company will continue as a going concern. The Company has no assets
         and has had recurring  operating  losses for the past several years and
         is dependent  upon  financing  to continue  operations.  The  financial
         statements  do not include any  adjustments  that might result from the
         outcome  of  this  uncertainty.  It is  management's  plan  to  find an
         operating  company to merge with,  thus  creating  necessary  operating
         revenue.

NOTE 3:       CAPITALIZATION

         In 1986, the Company issued  17,000,000  shares of common stock for the
         marketing rights to a waste milling device.  The value of this issuance
         was $17,000.


                                        7

<PAGE>



                            GALAXY SPECIALTIES, INC.
                          (A Development Stage Company)
                    NOTES TO FINANCIAL STATEMENTS (continued)
                                 March 31, 2001


NOTE 4:       RELATED PARTY TRANSACTIONS

         During the year ended June 30, 2000,  the Company  incurred  $28,000 of
         professional  fees payable to Mutual  Ventures  Corp. An officer of the
         Company is also an employee of Mutual Ventures Corp.

NOTE 5:       DEVELOPMENT STAGE COMPANY

         The  Company is a  development  stage  company as defined in  Financial
         Accounting  Standards  Board  Statement  No.  7.  It  is  concentrating
         substantially all of its efforts in raising capital and searching for a
         business operation with which to merge, or assets to acquire,  in order
         to generate significant operations.



                                        8

<PAGE>



         In this report  references  to "Galaxy  Specialities,"  "we," "us," and
"our" refer to Galaxy Specialities, Inc.

                           Forward Looking Statements

         This form 10-QSB contains certain forward-looking statements within the
meaning  of the  Private  Securities  Litigation  Reform  Act of 1995.  For this
purpose any statements  contained in this Form 10-QSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing,  words such as "may," "will," "expect," "believe,"  "anticipate,"
"estimate"  or "continue"  or  comparable  terminology  are intended to identify
forward-looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending on a
variety of  factors,  many of which are not within our  control.  These  factors
include  but  are  not  limited  to  economic  conditions  generally  and in the
industries  which we may participate;  competition  within our chosen market and
failure by Galaxy Specialities to successfully develop business relationships.

ITEM 2:   PLAN OF OPERATIONS

         We are a development  stage company with no assets and recurring losses
from inception and are dependent upon financing to continue operations.  For the
year ended June 30, 2000 and the nine months  ended  March 31,  2001,  we had no
cash on hand and total current liabilities of $28,000.  The $28,000 note payable
is for accounting  and legal fees incurred  during the 2000 fiscal year and paid
on our behalf by a related party.

         We have no material  commitments for the next twelve months. We believe
that our current  cash needs for at least the next  twelve  months can be met by
loans from our directors,  officers and shareholders  based on understandings we
have with these persons. However, these understandings are not formal agreements
and therefore these persons are not obligated to provide funds. We may repay any
loans,  costs of services and  advancements  with cash, if available,  or we may
convert them into common stock.

         Our management intends to actively pursue business opportunities during
the next twelve months. All risks inherent in new and inexperienced  enterprises
are  inherent in our  business.  We have not made a formal study of the economic
potential of any business.  At the present, we have not identified any assets or
business opportunities for acquisition.  If we obtain a business opportunity, it
may be necessary  to raise  additional  capital,  which may be  accomplished  by
selling our common stock.

         Based  on  current  economic  and  regulatory  conditions,   management
believes that it is possible, if not probable,  for a company like ours, without
many assets or liabilities,  to negotiate a merger or acquisition  with a viable
private company.  The opportunity arises  principally  because of the high legal
and  accounting  fees and the length of time  associated  with the  registration
process of "going public." However, should any of these conditions change, it is
very possible that there would be little or no economic  value for anyone taking
over control of Galaxy Specialities.

         Potential  investors must recognize that because of our limited capital
available for  investigation  and  management's  limited  experience in business
analysis we may not  discover or  adequately  evaluate  adverse  facts about the
business  opportunity  to be  acquired.  Also,  we  intend  to  concentrate  our
acquisition   efforts  on  properties  or  businesses  that  we  believe  to  be
undervalued  or that we believe may  realize a  substantial  benefit  from being
publicly owned.  Investors should expect that any acquisition candidate may have
little or no operating history, or a history of losses or low profitability.

         It is emphasized that our management may effect  transactions  having a
potentially  adverse impact upon our shareholders  pursuant to the authority and
discretion of our  management to complete  acquisitions  without  submitting any
proposal to the stockholders for their consideration.

         Should a merger or acquisition prove unsuccessful,  it is possible that
we may decide not to pursue  further  acquisition  activities and management may
abandon its activities and our shares would become worthless.

                           PART II: OTHER INFORMATION

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.
     --------
         None

(b)  Reports on Form 8-K.
     -------------------
         None


                                        9

<PAGE>


                                   SIGNATURES

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



                               Galaxy Specialties, Inc.

Date  April 18, 2001

                               By: /s/ Jeanne Ball
                                  Jeanne Ball, President and Director



                                       10