U.S. 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 September 30, 2001

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

            For the transition period from __________ to ___________

                         Commission File Number 0-30178

                               VIEW SYSTEMS, INC.
     -----------------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                Florida                             59-2928366
     -------------------------------    ------------------------------------
     (State or Other Jurisdiction of    (I.R.S. Employer Identification No.)
      Incorporation or Organization)

                             925 West Kenyon Avenue,
                            Englewood, Colorado 80110
                    ----------------------------------------
                    (Address of Principal Executive Offices)

                                 (303) 783-9153
                -------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

     -----------------------------------------------------------------------
   (Former Name, Former Address and Former Fiscal Year, if Changed Since Last
                                    Report)

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
    ---      ---

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court.

Yes       No
    ---      ---

<PAGE>


                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:  14,305,000 shares of common stock as
of September 30, 2001.

Transitional Small Business Disclosure Format (check one):
Yes       No  x
   ---       ---



<PAGE>


                                Table of Contents


PART I.  Financial Information

Item I.  Financial Statements
Consolidated Balance Sheet.....................................................1
Consolidated Statement of Operations...........................................2
Consolidated Statement of Stockholder's Equity.................................3
Statement of Cash Flows........................................................4
Notes to Consolidated Financial Statements.....................................5
Item II.  Management Discussion and Analysis...................................9

PART II.  Other Information

Item I.  Legal Proceedings....................................................12
Item II.  Changes In Securities...............................................12
Item III.  Defaults Upon Senior Securities....................................12
Item IV.  Submission of Matters To A Vote of Security Holders.................12
Item V.  Other Information....................................................12
Item VI.  Exhibits And Reports On Form 8-K....................................12


<PAGE>

PART 1.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

<TABLE>

                               VIEW SYSTEMS, INC.

                           CONSOLIDATED BALANCE SHEET

                                     ASSETS


                                                                       September 30,       December 31,
                                                                            2001               2000
                                                                       -------------      --------------
                                                                        (Unaudited)
CURRENT ASSETS:
<CAPTION>
<S>                                                                    <C>                <C>
    Cash                                                               $  366,207         $  265,245
    Accounts receivable (net)                                             562,488            155,017
    Inventory                                                             173,442             95,339
                                                                       -----------        -----------

             Total current assets                                       1,102,137            515,601
                                                                       -----------        -----------

PROPERTY AND EQUIPMENT:
    Equipment                                                             416,864            382,609
    Leasehold improvements                                                 20,261             20,261
                                                                       -----------        -----------
                                                                          437,125            402,870
        Less accumulated depreciation                                     113,387             79,814
                                                                       -----------        -----------

             Net value of property and equipment                          323,738            323,056
                                                                       -----------        -----------

OTHER ASSETS:
   Goodwill                                                               809,531            894,383
    Investments                                                            28,000             28,000
    Due from affiliated entity                                            105,552            105,552
    Due from stockholders                                                  79,099             20,000
    Deposits                                                                3,332                832
                                                                       -----------        -----------

             Total other assets                                         1,025,514          1,048,767
                                                                       -----------        -----------

             TOTAL ASSETS                                              $2,451,389         $1,887,424
                                                                       ===========        ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                   $  393,170         $  401,247
    Note payable bank                                                       6,720             42,083
    Notes payable                                                         110,000            110,000
    Accrued interest payable                                               30,250             22,000
    Other accrued liabilities                                               1,490             31,951
    Due to stockholder                                                        -                2,090
                                                                       -----------        -----------

                  Total current liabilities                               541,630            609,371
                                                                       -----------        -----------

STOCKHOLDERS? EQUITY:
    Common stock par value $0.001
      50,000,000 shares authorized,


</TABLE>
                                       4
<PAGE>


<TABLE>




<CAPTION>
   <S>                                                                    <C>                <C>
      14,305,000 shares issued and outstanding                             14,305               -
      11,481,031 shares issued and outstanding                                -               11,481
    Additional paid-in capital                                          8,875,678          7,364,502
    Accumulated deficit                                                (6,980,224)        (6,097,930)
                                                                       -----------        -----------

                  Total stockholders? equity                            1,909,759          1,278,053
                                                                       -----------        -----------

         TOTAL LIABILITIES AND
            STOCKHOLDERS' EQUITY                                       $2,451,389        $1,,887,424
                                                                       ===========       ============

</TABLE>


See accompanying notes.

<PAGE>


<TABLE>




                               VIEW SYSTEMS, INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                            Three Months Ended                         Nine months Ended
                                                            ------------------                         -----------------
                                                      September 30,      September 30,          September 30,       September 30,
                                                           2001               2000                   2001                2000
                                                     --------------      -------------          -------------       -------------


REVENUE:
<CAPTION>
<S>                                                  <C>                 <C>                    <C>                 <C>
         Sales of security systems                   $  312,353          $  31,719              $  744,842          $  146,979
         Sales of assembled electronic components          -                34,848                   9,512             261,080
                                                     --------------      -------------          -------------       ------------

              Total sales                               312,353             66,567                 754,354             408,059

              Cost of goods sold                        161,675             20,412                 360,575             211,168
                                                     --------------      -------------          -------------       ------------

GROSS PROFIT ON SALES                                   150,678             46,155                 393,779             196,891
                                                     --------------       ------------          -------------       ------------

OPERATING EXPENSES:
         Advertising and promotion                       31,168              1,283                  32,294              12,663
         Amortization                                    28,284             27,281                  84,852              81,843
         Depreciation                                    11,191             11,293                  33,573              33,404
         Dues and subscriptions                             885                495                   2,795               2,741
         Insurance                                       11,443              5,694                  28,138              13,174
         Interest                                         3,202              4,022                  11,800              15,570
         Investor relations                              22,525             15,488                  73,575              49,353
         Miscellaneous expense                              249             11,338                   9,741              13,777
         Office expenses                                 18,751             26,102                  82,208              92,311
         Professional fees                               75,362            110,757                 302,936             282,013
         Rent                                             7,779             26,746                  88,752              81,590
         Repairs and maintenance                            820              1,158                   8,560               8,165
         Research and development                          -                34,538                    -                143,840
         Salaries and benefits                          116,961            137,103                 422,178             420,032
         Sales promotions                                11,618             25,796                  35,723              74,050
         Taxes - other                                     -                   362                   9,151               4,667
              Travel                                     11,618              4,882                  35,723              34,412
         Utilities                                        2,348              4,875                  14,074              12,659
                                                     --------------       -----------          -------------       ------------

                  Total operating expenses              354,204            449,213              1,276, 073           1,376,264
                                                     --------------       -----------          -------------       ------------

NET LOSS FOR THE PERIODS                             $( 203,526)         $(403,058)            $ ( 882,294)         $(1,179,373)
                                                     ==============      ============          =============       ============


LOSS PER SHARE:

     Basic                                           $    (0.02)         $   (0.05)            $   (0.07)          $     (0.15)
                                                     ==============      ============          =============       ==============

     Diluted                                         $    (0.02)         $   (0.05)            $   (0.07)          $     (0.15)
                                                     ==============      ============          =============       ==============

</TABLE>
                                       2

See accompanying notes.
<PAGE>


<TABLE>



                                VIEW SYSTEMS, INC

                             See Accompanying Notes
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS? EQUITY
              FOR THE PERIOD JANUARY 1, 2000 TO SEPTEMBER 30, 2001


                                                              Additional                                     Total
                                             Common            Paid-In             Accumulated             Stockholders'
                                              Stock             Capital              Deficit                  Equity
                                            ---------         --------------    ------------------        ---------------
<CAPTION>
<S>                  <C>                    <C>               <C>               <C>                       <C>
 Balances at January 1, 2000                $  7,167          $  5,334,342      $( 3,893,648)             $  1,447,861

    Sale of common stock                       1,285               863,991              -                      865,276


    Stock options  exercised                     100                   978              -                        1,078

    Net loss for the nine months
      ended September  30, 2000                 -                     -          ( 1,179,373)              ( 1,179,373)
                                            ----------         --------------    -------------------       --------------
Balances at September 30, 2000 (Unaudited)     8,552             6,199,311       ( 5,073,021)                1,134,842

    Sale of common stock                       1,446               583,044              -                      584,490

    Stock options exercised                      100                   978              -                        1,078

    Issuance of common stock
      (employee and other compensation)        1,383               581,169              -                      582,552

    Net loss for the period of October 1, 2000
      to December 31, 2000                      -                     -          ( 1,024,909)              ( 1,024,909)
                                            -----------        --------------    ------------------        -------------

Balances at December 31, 2000                 11,481             7,364,502       ( 6,097,930)                1,278,053

    Sale of common stock                       2,764             1,486,236              -                    1,489,000

    Issuance of common stock
          for services                            60                24,940              -                       25,000

    Net loss for the nine months
        ended September 30, 2001                -                     -          (   882,294)              (   882,294)
                                            -----------        --------------    ------------------        -------------

Balances at September 30, 2001 (Unaudited)  $ 14,305           $ 8,875,678      $( 6,980,224)             $  1,909,759
                                            ===========        ===========       ==================       ==============

</TABLE>
                                       3

<PAGE>




<TABLE>
                              VIEW SYSTEMS, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE NINE MONTHS ENDED


                                                                       September 30,          September 30,
                                                                            2001                  2000
                                                                       -------------        --------------
                                                                         (Unaudited)           (Unaudited)
<CAPTION>
<S>                                                                    <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                           $(  882,294)          $( 1,179,373)
    Adjustments to reconcile net income to net cash
       provided by operating activities:
       Depreciation and amortization                                       118,425               115,247
       Stock issued for services                                            25,000                  -
       Changes in operating assets and liabilities:
         Accounts receivable                                            (  407,471)               51,051
         Inventory                                                      (   78,103)           (   76,839)
         Deposit                                                        (    2,500)           (    1,653)
         Accounts payable                                               (    8,077)              162,489
         Accrued interest                                                    8,250                 8,250
         Other accrued liabilities                                      (   30,461)               19,910
                                                                       -------------        --------------

         Net cash used in operating activities                          ( 1,257,231)          (  900,918)
                                                                       -------------        --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchase of property and equipment                            (    34,255)          (   34,972)
          Funds advanced to affiliated entities                                -              (   12,443)
                                                                       -------------        --------------

        Net cash used in investing activities                           (    34,255)          (   47,415)
                                                                       -------------        --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
         Funds advanced (to) from shareholders                          (    61,189)              60,038
         Repayment of note payable - bank                             (    35,363)          (   23,166)
         Proceeds from sales of stock                                    1, 489,000              866,354
                                                                       -------------        --------------

       Net cash provided by financing activities                          1,392,448              903,226
                                                                       -------------        --------------

NET INCREASE/(DECREASE) IN CASH                                             100,962           (   45,107)

CASH AT BEGINNING OF PERIOD                                                 265,245               89,150
                                                                       -------------        --------------

CASH AT END OF PERIOD                                                 $     366,207         $     44,043
                                                                      ==============        ==============

</TABLE>
                                       4
<PAGE>


                               VIEW SYSTEMS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

              Nature of Operations
              --------------------

          View  Systems,  Inc.  (the  "Company")  designs and develops  computer
software and hardware used in conjunction with  surveillance  capabilities.  The
technology  utilizes  the  compression  and  decompression  of  digital  inputs.
Operations, from formation to September 30, 1999, have been devoted primarily to
raising  capital,  developing  the  technology,  promotion,  and  administrative
function.

              Basis of Consolidation
              ----------------------

          The  consolidated  financial  statements  include the  accounts of the
Company  and its wholly  owned  subsidiaries,  Real View  Systems,  Inc.  ("Real
View"),  Xyros  Systems,  Inc.  ("Xyros") and Eastern Tech  Manufacturing,  Inc.
(?ETMC?).  All  significant  intercompany  accounts and  transactions  have been
eliminated in consolidation.

              Use of Estimates
              ----------------

          Management  uses  estimates  and  assumptions  in preparing  financial
statements in accordance with accounting  principles  generally  accepted in the
United States.  Those estimates and assumptions  affect the reported  amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and
the  reported  revenues  and  expenses.  Actual  results  could  differ from the
estimates that were used.

              Revenue Recognition
              -------------------

          The Company  and its  subsidiaries  recognize  revenue and the related
cost of goods sold upon shipment of the product.

          In December  1999,  the  Securities  and Exchange  Commission  ("SEC")
issued Staff Accounting  Bulletin No. 101 ("SAB 101"),  "Revenue  Recognition in
Financial  Statements".  SAB 101  summarizes  certain  of  the  SEC's  views  in
applying  accounting  principles  generally  accepted  in the  United  States to
revenue recognition in financial statements.  The Company adopted SAB 101 in the
fourth  quarter of 2000.  The adoption of SAB 101 had no impact on the Company's
financial position or results of operations.

              Inventories
              -----------

          Inventories  are  stated  at the  lower  of  cost or  market.  Cost is
determined by the last-in-first-out method (LIFO).

              Property and Equipment
              ----------------------

          Property and equipment is recorded at cost and depreciated  over their
estimated useful lives,  using the  straight-line  and accelerated  depreciation
methods. Upon sale or retirement,  the cost and related accumulated depreciation
are eliminated from the respective  accounts,  and the resulting gain or loss is
included  in the  results  of  operations.  The  useful  lives of  property  and
equipment for purposes of computing depreciation are as follows:

                                       5
<PAGE>

                   Equipment                                   5-7 years
                   Software tools                                3 years



                               VIEW SYSTEMS, INC.

          Repairs and maintenance charges which do not increase the useful lives
of assets are charged to  operations as incurred.  Depreciation  expense for the
nine months ended  September  30, 2001 and 2000  amounted to $33,573 and $33,404
respectively.

              Impairment of Long-Lived Assets
              -------------------------------

          Long-lived assets and identifiable intangibles (including goodwill) to
be held and used are  reviewed  for  impairment  whenever  events or  changes in
circumstances indicate that the carrying amount should be addressed.  Impairment
is measured by comparing the carrying value to the estimated undiscounted future
cash  flows  expected  to  result  from use of the  assets  and  their  eventual
disposition.

              Income Taxes
              ------------

          Deferred  income  taxes are  recorded  under  the asset and  liability
method whereby deferred tax assets and liabilities are recognized for the future
tax  consequences,  measured by enacted tax rates,  attributable  to differences
between  the  financial  statement  carrying  amounts  of  existing  assets  and
liabilities and their respective tax bases and operating loss carryforwards. The
effect  on  deferred  tax  assets  and  liabilities  of a change in tax rates is
recognized in income in the period the rate change becomes effective.  Valuation
allowances  are recorded for deferred tax assets when it is more likely than not
that such deferred tax assets will not be realized.

              Research and Development
              ------------------------

          Research and development costs are expensed as incurred. Equipment and
facilities   acquired  for  research  and   development   activities  that  have
alternative  future  uses  are  capitalized  and  charged  to  expense  over the
estimated useful lives.

              Advertising
              -----------

          Advertising  costs are charged to operations as incurred.  Advertising
costs for the nine months  ended  September  30, 2001 and 2000 were  $32,294 and
$12,668, respectively.

              Nonmonetary Transactions
              ------------------------

          Nonmonetary   transactions   are  accounted  for  in  accordance  with
Accounting   Principles   Board  Opinion  No.  29  Accounting  for   Nonmonetary
Transactions  which requires the transfer or distribution of a nonmonetary asset
or liability to be based, generally, on the fair value of the asset or liability
that is received or surrendered, whichever is more clearly evident.

              Financial Instruments
              ---------------------

          For most financial  instruments,  including cash, accounts receivable,
accounts  payable and accruals,  management  believes  that the carrying  amount
approximates  fair value, as the majority of these instruments are short-term in
nature.

                                       6
<PAGE>


                               VIEW SYSTEMS, INC.


              Net Loss Per Common Share
              -------------------------

          Basic net loss per common share  ("Basic EPS") is computed by dividing
net loss  available to common  stockholders  by the weighted  average  number of
common shares outstanding.  Diluted net loss per common share ("Diluted EPS") is
computed by dividing net loss available to common  stockholders  by the weighted
average number of common shares and dilutive  potential common share equivalents
then  outstanding.  Potential  common shares consist of shares issuable upon the
exercise of stock  options and  warrants.  The  calculation  of the net loss per
share available to common  stockholders  for the nine months ended September 30,
2001 does not include  potential  shares of common stock  equivalents,  as their
impact would be antidilutive.

              Segment Reporting
              -----------------

          The  company  has  determined  that it does not  have  any  separately
reportable operating segments as of September 30, 2001.

2.  FINANCIAL CONDITION

          Since its inception,  the Company has incurred  significant losses and
as of September 30, 2001 had an accumulated deficit of $7.0 million.  The tragic
events of September 11, 2001 have, however, generated  an increased  interest in
the  Company's  products and services.  While the Company  believes that it will
incur operating  losses in the near term, it is anticipated that increased sales
resulting   from the  heightened   interest  in  security products  will have  a
significantly  positive effect on the Company's earnings.  However, there can be
no assurance  that the Company will be able to generate  sufficient  revenues to
achieve or sustain  profitability  in the future.  The Company believes that its
current  cash and cash  equivalents,  along with sales  revenue and  anticipated
equity infusions, will be sufficient to sustain operations through September 30,
2002.

3.  NEW ACCOUNTING PRONOUNCEMENTS

          In  July  2001,  the  Financial   Accounting  Standards  Board  issued
Statement  of  Financial   Accounting   Standards  ("SFAS")  No.  141,  Business
Combinations,  and SFAS No. 142, Goodwill and Other Intangible Assets.  SFAS No.
141 requires  that the purchase  method of  accounting  be used for all business
combinations  initiated  after June 30, 2001.  SFAS No. 141 also  specifies  the
criteria  for  intangible   assets   acquired  in  a  purchase  method  business
combination to be recognized and reported apart from goodwill. SFAS No. 142 will
require goodwill and intangible assets with indefinite useful lives to no longer
be amortized,  but instead tested for impairment at least annually in accordance
with the provisions of the statement.  SFAS No. 142 will also require intangible
assets  with  definite  useful  lives  to be  amortized  over  their  respective
estimated  useful lives to their  estimated  residual  values,  and reviewed for
impairment in accordance  with SFAS No. 121,  Accounting  for the  Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of.

          The  Company  is  required  to adopt  the  provision  of SFAS No.  141
immediately  and SFAS No.  142  effective  January 1, 2002.  Further  more,  any
goodwill and any intangible  assets determined to have an indefinite useful life
that are acquired in a purchase  business  combination  completed after June 30,
2001, will not be amortized, but will continue to be evaluated for impairment in
accordance with the appropriate pre-SFAS No. 142 accounting literature. Goodwill
and intangible assets acquired in business combinations completed before July 1,
2001, will continue to be amortized prior to the adoption of SFAS No. 142.


                                       7
<PAGE>



          SFAS No. 141 will  require,  upon  adoption of SFAS No. 142,  that the
Company evaluate its existing  intangible assets and goodwill that were acquired
in   prior   purchase   business   combinations,    and   make   any   necessary
reclassifications  in order to conform with the new criteria in SFAS No. 141 for
recognition apart from goodwill. Upon adoption of SFAS No. 142, the Company will
be required to reassess the useful lives and residual  values for all intangible
assets  acquired  in  purchase  business  combinations,  and make any  necessary
changes to the amortization  period by the end of the first interim period after
adoption. In addition, to the extent an intangible asset is identified as having
an indefinite  useful life,  the Company will be required to test the intangible
asset for  impairment in accordance  with the  provisions of SFAS No. 142 within
the first interim period. Any impairment loss will be measured as of the date of
adoption  and  recognized  as the  cumulative  effect of a change in  accounting
principle in the first interim  period.  The Company is assessing the effects of
the adoption of these standards and these potential effects cannot be determined
at this time.


                                        8
<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS


          The following  discussion  should be read and reviewed in  conjunction
with Management's  Discussion and Analysis of Financial Condition and Results of
Operations set forth in the Company's  Annual Report on Form 10-KSB for the year
ended December 31, 2000. In addition to historical information, this Form 10-KSB
contains forward-looking  statements that involve risks and uncertainties,  such
as statements  of the Company's  plans and  expectations.  The Company's  actual
results could differ materially from management's expectations.

          In the first several years of operation  since September 1998, we have
devoted most of our resources to the research and  development  of digital video
surveillance and security products.  We have generated limited revenues from our
security  products to date, but are rapidly expanding our sales and distribution
network.  During the last year we have  working on  delivering  new  products to
market and enhancing and upgrading our product line. Until we more fully develop
our sales and distribution  network, we expect our operating losses to continue.
Although  our  revenue  from  contract   manufacturing  services  has  decreased
significantly,  we still provide  contract  manufacturing  services,  and remain
ready to take advantage of potential increases in this market. ETMC had provided
such services for more than 15 years and had an established customer base. While
we have  continued the contract  manufacturing  business line, we have increased
ETMC's manufacturing capacity to permit production of our products.

          The tragic events of September 11, 2001 generated a larger than normal
interest in our products and  services.  This trend has  continued and inquiries
have  increased  proportionately.  On-line  and  web  site  inquires  more  than
quadrupled  and phone  inquires more than tripled  since  September 11, 2001. We
have  added  two more  inbound  telephone  lines  and are  staffing  to meet the
increased demand.  We have $2,800,000 of purchase orders,  some which are backed
by letters of credit.

Nine months  Ended  September  30,  2001  Compared  With the Nine  months  Ended
September 30, 2000

Revenue

          For the nine months ended  September 30, 2001,  revenues from sales of
our products  increased  $597,863 or 407% to $744,842  from $146,979 in the same
period last year, and revenues from sales of our services  decreased $251,568 or
96% to $9,512 from  $261,080 in the same  period last year.  Of the  $754,354 in
total revenue during the nine month period ended September 30, 2001, $744,842 or
99% was  derived  from sales of systems  and $9,512 or 1% from sales of contract
manufacturing services. While the percentage of revenues generated from sales of
our  contract  manufacturing  services  has  decreased  significantly,  we  will
continue to provide contract  manufacturing  services,  and remain ready to take
advantage of potential increases in this market.

Gross Profit

          Gross  profit on sales for the nine months ended  September  30, 2001,
increased  $196,888 or 100%,  to  $393,779  compared  with  $196,891 in the same
period last year.  Gross profit  margin for the nine months ended  September 30,
2001, was 52% compared with 48% in the same period last year. Because of low net
sales we achieved in the period last year ended  September  30, 2000,  we do not
believe  gross profit  margin  comparisons  are  meaningful at this state of our
operations.

Operating Expenses

          Operating  expenses  for the nine months  ended  September  30,  2001,
decreased to $1,276,073 from  $1,376,264 for the comparable  period in 2000. The
decrease is principally due to decreased expenditures in sales promotions.


                                        9
<PAGE>

          As a result of the  foregoing,  net loss was  $(882,294)  for the nine
months ended September 30, 2001,  compared to a net loss of $(1,179,373) for the
nine months ended September 30, 2000. The basic and fully diluted loss per share
is $.02 for the 3rd  quarter  2001,  compared  to $.05 for the same  period last
year.  The basic  and fully  diluted  loss per share for the nine  months  ended
September 30, 2001 is $.07 compared to $.15 for the same period last year.

Costs and Expenses

          Costs of Products and Services Sold. The cost of products and services
sold was $360,575 for the nine months ended  September  30, 2001 and  represents
48% of revenue for the period,  compared to $211,168  for the nine months  ended
September 30, 2000 which represents 52% of revenues for that period.  Because of
our low sales volume in the same period last year,  we do not consider the costs
of goods sold in the same period last year to be a good measure of our true cost
of goods  sold.  We  anticipate  that our profit  margins  on sales of  security
systems will exceed our profit margins on sales of services.

We are continually  working on engineering changes in our security products that
we expect will lower component costs for these products. We do not determine our
inventory on a quarterly basis, instead we do it on an annual basis.  Therefore,
our cost of goods sold is based on estimates of inventory used in products sold.

          Research  and  Development  Expense.  No  expenditures  were  made  on
research and  development  for the nine months  ended  September  30,  2001,  as
compared with $143,840 in the same period last year.

          Salaries and Benefits.  We spent $422,178 on salaries and benefits for
the nine months ended September 30, 2001, as compared with $420,032 for the same
period  last  year.  Going  forward,  we  plan  to  significantly  increase  our
expenditures in salaries and benefits to address the additional  staffing needed
in the aftermath of the events of September 11.

          Net Operating Loss. We incurred $(882,294) of net operating losses for
the  nine-month  period ended  September  30, 2001,  which may be used to offset
taxable income in future years.

LIQUIDITY AND CAPITAL RESOURCES

          Since the start-up of our  operations in 1998, we have funded our cash
requirements primarily through equity transactions. We received $8,276,259 since
inception  through the issuance of our common  stock.  We used the proceeds from
these  sales  of  equity  to  fund  operating  activities,   including,  product
development,   sales  and  marketing,  and  to  invest  in  the  acquisition  of
technology,  assets and business.  We are not currently generating cash from our
operations  in  sufficient  amounts to finance our business and will continue to
need to raise capital from other sources. As of September 30, 2001, we had total
assets of  $2,451,389 an increase of $563,965 over the December 31, 2000 balance
of $1,887,424. Total liabilities were $541,630, at September 30, 2001, resulting
in stockholders' equity of $1,909,759, an increase of $631,706 from the December
31, 2000 balance of $1,278,053.

          During the nine months ended  September 30, 2001,  our cash  increased
from $265,245 at December 31, 2000, to $366,207 at September 30, 2001.  Net cash
used in operating  activities was $1,257,231 for the nine months ended September
30, 2001,  including increases in accounts receivable of $407,471,  increases in
inventory of $78,103, and decreases in accounts payable of $8,077.

          Net cash generated from  financing  activities  during the nine months
ended  September 30, 2001 was $1,392,448,  consisting of proceeds  received from
sales of stock of  $1,489,000,  less  $61,189  advanced  to  stockholders,  less
payments  of  $35,363  made  on a  promissory  note  to  Columbia  Bank  with an
outstanding principal balance of $6,720 at September 30, 2001.

          As a result of the  foregoing,  at  September  30, 2001 we had working

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<PAGE>

capital of $560,507,  $562,488 of net trade accounts receivable, and $173,442 in
inventory.  We have provided and may continue to provide payment term extensions
to certain of our  customers  from time to time.  As of September 30, 2001 there
were not material payment term extensions in effect.

          Our  inventory  balance at  September  30, 2001,  was  estimated to be
$173,442.  We do not take inventory on a quarterly  basis, and we made inventory
estimates  based on annual  inventory  determinations.  With expected  increased
product sales, we will need to make increased inventory  expenditures.  However,
the terms of our product  sales  frequently  require a twenty five percent (25%)
deposit on order.  In  addition,  we  endeavor  to keep  inventory  levels  low.
Therefore,  we do not believe that increased  product  sales,  and the resulting
materials purchases and inventory increases,  will adversely affect liquidity in
any material respect.

          Under our  outstanding  employment and consulting  agreements,  we are
obligated  to pay Gunther  Than,  President  and CEO,  $96,000  per year.  If we
terminate  the  employment  of Mr.  Than  without  cause or  because  of merger,
acquisition or change in control,  we will be obligated to pay him approximately
$350,000 in severance payments over a three year period.

         We believe that cash from operations and funds available will not be
          sufficient to meet anticipated  operating capital expenditure and debt
service
requirements for the next twelve months and that we will be dependent on raising
additional capital through equity sales or debt financing.


Plan Of Operation

          The amount of  capital  that we need to raise  will  depend  upon many
factors primarily including:

          -    the rate of sales  growth and market  acceptance  of our  product
               lines;
          -    the amount and time of expenditures  to  sufficiently  market and
               promote  our  products;  and
          -    the amount and timing of any accessory product introductions.

          We intend to use the cash raised  from the private  sale of shares and
the exercise of warrants held by stockholders to the following:

          -    bring our  FaceView,  PlateView  and Access  Control  products to
               market;
          -    continue our product  development  efforts;
          -    expand our sales,  marketing and  promotional  activities for the
               SecureView line of products; and
          -    increase our sales and marketing and customer support staff.

          We operate in a very  competitive  industry  that  requires  continued
large amounts of capital to develop and promote our products. We believe that it
will be essential to continue to raise additional  capital,  both internally and
externally, to compete in this industry.

          In addition to accessing  the public and private  equity  markets,  we
will pursue  bank credit  lines and  equipment  lease lines for certain  capital
expenditures.  We  currently  estimate  we will need  between $2 million  and $3
million  to launch our  expanded  business  operations  in  accordance  with our
current business plan.

RISK FACTORS AND CAUTIONARY STATEMENTS

          Statements  within this Form 10-QSB  which are not  historical  facts,
including  statements  about  strategies and  expectations  for new and existing
products,  technologies, and opportunities,  are forward-looking statements that
involve risks and  uncertainties.  Our actual  results may differ  substantially
from such forward-looking  statements.  Forward-looking statements involve risks
and  uncertainties  that could cause actual  results to differ  materially  from
those  expressed  or implied by the  statement,  including,  but not limited to,
risks detailed in our other securities  filings,  including our Annual Report on
form 10-KSB for the year ended December 31, 2000, and a registration  statement,
as amended, filed on Form SB-2


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<PAGE>


PART II.  OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS



          We are not aware of any material pending legal  proceeding  against us
or our property.


ITEM 2. CHANGES IN SECURITIES

          There are no changes in securities other than such changes reported in
our SB-2 filed on August 1, 2001, registration number 333-66482.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES

          None.

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

          None.

ITEM 5. OTHER INFORMATION

          None.

ITEM 6. EXHIBITS AND REPORT ON FORM 8-K

(A)      EXHIBITS:
         --------

3.1      (1)      Articles of Incorporation and all articles of amendment
3.2      (1)      By-laws
11.      (attached to report)    Statement re: Computation of Per Share Earnings

(1)  Incorporated By Reference From Issuer's Registration Statement on Form SB-2
     Filed  With The  Securities  & Exchange  Commission  On  January  11,  2000


(B)      REPORTS ON FORM 8-K
         -------------------

          On July 16, 2001, the Company filed a Report on Form 8-K, under Item 5
of Form 8-K,  announcing  that the  Company  disputes  the  claim of  beneficial
ownership  by Rubin  Investment  Group  ("Rubin")  set forth in its Schedule 13D
filing on July 12,  2001,  in which  Rubin  claimed a  beneficial  ownership  of
2,235,000 shares that it may acquire upon the exercise of certain warrants.


                                       12
<PAGE>


                                   SIGNATURES


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



                                                             View Systems, Inc.
                                                             Registrant



Date:  November 14, 2001                                      /s/ GUNTHER THAN
                                                              ----------------
                                                              GUNTHER THAN
                                                              PRESIDENT & CEO



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